PE, VC investments jump to all-time high of $77 bn in 2021: Report
- IBEF
- January 19, 2022
According to research released on Tuesday, private equity and venture capital groups spent US$ 77 billion in Indian companies in 2021, up 62% from the previous year. According to the research by industry group IVCA and consultancy EY, there was a 37% increase to 1,266 transactions.
As a result of the pandemic, there was a tremendous oversupply of liquidity around the world this year, which led to higher investments in numerous assets and a rise in prices. Vivek Soni, a partner at the consultancy firm, said there was an increase in investments from the beginning of the year, which accelerated in the second half of the previous year.
According to the research, investments in start-ups were a defining aspect of 2021, accounting for US$ 28.8 billion in funding, or 37% of total PE/VC investments. It went on to say that the year saw the addition of 44 unicorns, or start-ups worth more than a billion dollars, making India the third-largest home for such businesses.
The sharp increase in pure-play PE/VC investments, or investments in sectors other than real estate and infrastructure, which surged 79% to US$ 67 billion in 2021, was one of the main reasons for the outstanding success of PE/VC investments, according to the report.
After a significant drop in 2020 due to the pandemic, buyouts rebounded strongly and were the second-largest deal type, with US$ 22 billion spread across 63 transactions, the biggest ever by dollar amount.
According to the report, private investment in public equity (PIPE) deals surged by 46% to US$ 4.5 billion over 77 deals, while credit investments remained unchanged at US$ 2.6 billion.
Exits reached an all-time high of US$ 43.2 billion in 2021, more than seven times the amount in 2020 and 60% higher than the previous high of US$ 27 billion in 2018, according to the report.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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