Private equity (PE) and venture capital (VC) firms invested $4.5 billion across 117 deals last month, a 180% year-on-year (YoY) jump from January 2021, which logged $1.6 billion, according to a report by the Indian Venture and Alternate Capital Association (IVCA) and consultancy firm EY.
However, deal value in January 2022 remained almost on a par with $4.4 billion in December 2021, the report said.
The deal value last month was driven by 13 transactions worth more than $100 million totaling $2.9 billion. This compared to three large deals of over $100 million aggregating $680 million in January 2021 and 12 deals worth totaling $2.8 billion in December 2021.
The largest deal in January 2022 saw Alpha Wave, Prosus Ventures, Qatar Investment Authority (QIA), and others invest $700 million in Swiggy.
January saw the lowest buyouts, with two deals totaling $133 million. Investments in PIPE (private investments in public stocks) totaled $320 million across four transactions, while credit investments totaled $300 million across 10 transactions.
E-commerce remained the most popular sector, with $1.7 billion in PE/VC investments spread across 20 deals. This was followed by technology, which pulled in $652 million across 18 agreements, and financial services, which received $390 million across 20 deals.
In January 2021, 14 exits totaling $289 million were recorded, compared to $342 million from 10 exits in January 2021 and $825 million from 23 exits in December 2021. Secondary exits had the highest value of $286 million across three deals, while strategic exits had the highest number of deals with 10.
“While secondary exits have driven most of the disclosed exit value, the aggregate exit value could be higher as most strategic deals have not disclosed transaction values. After a spate of PE-backed IPOs in 2021, there were no PE-backed IPOs in January 2022 on account of increased volatility in the mid-cap and small-cap indices and should the current prevailing market volatility persist, February and March 2022 could be similar,” said Vivek Soni, Partner and National Leader Private Equity Services, EY.
The largest fundraise in January was by HDFC Capital Affordable Real Estate Fund that raised its third fund worth $1.9 billion, January recorded a total fundraise of $3 billion across seven funds compared to $854 million raised in January 2021 across eight funds.
“After a two-year decline, fundraising by India focused PE/VC funds has picked-up, with January 2022 recording US$3 billion in fundraises. While majority of the fundraises over the past five years have been sector agnostic, fund raising by technology/internet dedicated funds as well as clean energy related funds has picked up in recent years. Mirroring what has been observed in US and European markets in 2021, we expect 2022 to be a record-setting year for fund raises by Indian dedicated PE/VC funds,” said Soni.
