Investments in Indian entities by venture capital and private equity funds sharply decreased to $2.7 billion in July of this year, according to a report released on Wednesday. The investments were 42% lower than the $4.6 billion recorded in the previous month of June, and 35% less than the $4.1 billion in July of the preceding year, as stated by the report from the industry lobby group IVCA and consultancy EY.
Interestingly, the number of deals increased to 81 from 68 transactions in the year-ago period, indicating the deal sizes were down.
"The second half of 2024 appears to have had a weak start. We expect PE/VC investors to take a cautious approach as concerns over global uncertainties, inflation and geopolitical tensions play out, influencing the confidence and willingness of investors to deploy additional capital," the firm's partner Vivek Soni said.
He added that the budget has been a 'net positive' for the sector and added that the angel tax removal should stimulate investor interest in the start-up space.
The number of large deals valued at over $100 million each declined to six in July 2024 and the aggregate value of $1.5 billion was 58% lower compared to the year-ago period, the report said.
In July 2024, buyout investments constituted the largest share, with $1.2 billion invested in five deals, in contrast to $2.9 billion invested in six deals in July 2023. Additionally, start-up investments increased by 31%, reaching $729 million, making it the second-largest category.
The month saw 16 exits totaling $2.5 billion, compared to the $3 billion from 20 deals in July 2023.
Private equity and venture capital funds secured $434 million for future investments in the month, an amount comparable to that of June this year, yet surpassing the figures from the same period last year.
(With PTI Inputs)
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