However, since the start of the year, the venture capital investments of these two categories of investors have doubled to reach USD 20 billion for the first five months of 2021, according to the report by industry lobby IVCA and the consultancy firm. EY, stressing that investors continue to stay. bullish.
It can be noted that the country has suffered the ravages of the second wave of the pandemic since April of this year. There were localized lockdowns across the country in May 2021, when there was $ 4.6 billion in investment in Jio platforms in May 2020 despite the nationwide lockdown.
“Investors will closely monitor the government’s readiness to avoid / manage a possible third wave, better vaccine deployment and the impact of the pandemic on the macro and fiscal health of the country over the coming months,” said Vivek Soni , partner of EY.
He pointed to rising global inflation, its impact on commodity prices and the US Fed’s response to curbing inflation as the main risks for India.
The report states that the increase in transaction activity in 2021 is being driven by “COVID-resilient sectors” such as e-commerce (which received $ 4.3 billion in investment), technology (3.8 billion), pharma ($ 1.4 billion), media and entertainment. (USD 1.2 billion), education (885 million USD) and health care (801 million USD).
“We expect this ‘polarization’ of investment to continue until the outlook for the lockdowns and disruption associated with the pandemic changes significantly,” Soni said.
In terms of the number of transactions, the 60 transactions in May 2021 were almost at the same level as a year ago, but lower than the 70 recorded in April.
Real estate and infrastructure investments of more than $ 1 billion contributed to the overall number of deals in May, as investment in pure PE and venture capital operations fell 54% to 2.5 billions of dollars.
From an exits perspective, May 2021 saw divestments of $ 12 billion to become the second best month so far, he said, adding that capital market-induced exits will increase significantly. significant as a number of Indian “unicorns” like Zomato and Paytm follow on their IPO plans.
Total fundraising in May was $ 154 million, up from $ 50 million in May 2020, and included Motilal Oswal who raised $ 89 million when his fifth real estate fund closed for the first time.