PE/VC investments rises to US$ 10.7 billion in August 2021; IPOs drive surge in exits; Report

As per a report published by IVCA and EY, on September 15, 2021, private equity and venture capital investments increased to US$ 10.7 billion in August 2021, as compared to US$ 2.2 billion in August 2020 and US$ 9.7 billion in July 2021.

The report states that in terms of volume, the number of transactions increased to 137 in August 2021, as compared to 83 in August 2020 and 77 in July 2021.

In August 2021, initial public offers (IPOs) such as Zomato led to exits worth US$ 7.3 billion, taking the total number to US$ 30.7 billion in 2021.

EY's partner, Mr. Vivek Soni said, "In the first eight months of the year, there was significant growth in PE/VC funds, boosting both investments and exits towards growth.”

He stated that in the first eight months of the year, the investments stood at US$ 47.3 billion, at par with the figures of 2020, driven by rising activities in the start-up sector and increasing number of buyouts.

Mr. Soni stated that investment in the start-up sector is estimated at US$ 15.3 billion in 2021, a growth of 31% as compared to 2019.

In 2021, e-commerce is estimated to account for a fourth of all investments, due to rising number of investor interest. Financial services and technology are the second and third-most attractive sector for investments in 2021.

As per the report, Exits have exceeded the previous year’s record with 22 IPOs. In August 2021, number of deals were 38, valued at US$ 7.3 billion, as compared to 17 deals valued at US$ 67 million in August 2020 and 25 deals valued at US$ 1.2 billion in July 2021.

Mr. Soni added, "As the vaccination coverage increases in the country, the anticipation for improved economic activity also rises, along with the hope of returning back to pre-pandemic normal. However, with a potential resurgence of the pandemic, there might be a risk of inflation and a potential rise in commodity prices (specially oil).

In August 2021, the total fundraises stood at US$ 1.8 billion, as against US$D 480 million in August 2020.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.