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In comparison to the same time frame the year before, the amount of private equity and venture capital (PE/VC) funds in Indian companies fell by nearly 4 percent to 27.5 billion, the report announced on Thursday. However, the investments increased by 33% in value compared to July through December 2022, according to the information from the industry’s lobby Indian Venture and Alternate Capital Association (IVCA) and the consulting firm EY declared.
Investments totaled USD 35.9 billion for the opening quarter (H1) in 2022, but the values fell by USD 20.6 billion by the end of the second half of 2022.
According to the figures, the number of deals was 427, less than 16% lower than the previous quarter and 44% down from last year’s period.
“Growth to late-stage funding i.e. Series B onwards has already been hit and may continue to stay subdued for a few quarters more as valuations had run ahead of themselves in 2021 and early-2022. However, startups which showcase signs of building a healthy sustainable business with improving margins and continue to tap into vast market opportunities should be able to raise funds even in the current market scenario,” Ankur Mittal, Co-founder of Inflection Point Ventures.
“As investors, we strongly align with the investing philosophy famously quoted by Warren Buffet, ‘Be greedy when others are fearful and be fearful when others are greedy’. We follow this principle by capitalizing on opportunities during times of uncertainty,” Buffet said.
Even though there’s been a decrease in startups, PE/VC investments are growing, as per the EY Partner Vivek Soni.
According to the report, the PE/VC funds raised more than US$ 10.2 billion in the first quarter of 2018, which is optimistic for the future of investment.
“Going forward, we plan to pursue big-ticket investments via the co-investment model, with a cumulative investment target of over USD 1.5 billion in the coming three to four years through Fund IV,” stated Renuka Ramnath who is the founder Director, MD as well as CEO at Multiples PE, as the company celebrated the first closing to its fourth investment fund with USD640million in May.
The report for June also stated that investments fell by 42% during June to USD 3.1 billion. This was an improvement of 9% over May.
The report also noted that the most significant transactions of June were that of the USD 1.1 billion purchase from HDFC Credila Financial Services by BPEA EQT and Chryscapital and the USD 297 million majority stake acquisition from Watertec India by Warburg Pincus.
In the month, there were 38 exits totaling the sum of USD 2.1 billion, compared to 18 deals worth USD 2 billion in the same period in 2013. The report also revealed that PE/VC funds made a sum worth 3.8 billion during the month.