BENGALURU: India’s private equity and venture capital market continued to show a downward trend in activity, with deal values recording 73 per cent year-on-year decline in April 2020 at $881 million and 1.9 per cent slump month-on-month, showed a survery.
According to the survey held by Indian Private Equity and Venture Capital Association and Ernst & Young India, barring an over $100 million deal and a few investments in start-ups, most sectors did not see noteworthy deal activity.
April also saw the lowest monthly deal value activity in 34 months; the volume of investments dropped 30 per cent YoY. On the bright side, the blockbuster Foreign Direct Investment (FDI) deals that Mukesh Ambani’s Reliance Jio struck with Facebook, Silver Lake and Vita Equity would help attract the Silicon Valley investment giants to Indian markets, especially because of its aggressively growing digital ecosystem, said Vivek Soni, partner and national leader, EY India.
From Indian investors’ standpoint, Soni said, the stakeholders will adopt a wait-and-watch policy as uncertainty persists around business continuity, sales forecasts, supply chain and valuation, even as the Centre has begun phase-wise relaxation of lockdown.
Even as all the deal types saw value decline in April 2020, the start-up investments were the highest in value, at $347 million from 44 deals. This was followed by growth in funding at $205 million, a single buyout at $204 million and Private Investments in Public Enterprises (PIPE) deals at $119 million.
Strong deals in infra, financial services, e-commerce
Infrastructure ($208 million), financial services ($168 million) and e-commerce ($145 million) saw some strong deal activity in April 2020 even as a majority of the sectors have struggled to generate revenue under the continued lockdown.