In 2019, private equity and venture capital investments in India reached an all-time high in terms of both value and volume. In terms of value, investments increased at 28 per cent to US$ 48 billion, compared to US$ 37.4 billion recorded in 2018.
The growth witnessed was on the back of increased investments in the infrastructure sector which alone accounted for 30 per cent of the overall investments in 2019 by value compared to 12 per cent in 2018, as per the EY data.
The data also included deals that were announced but are still awaiting closure like ADIA, PSP and NIIF’s investment in GVK and others.
In 2019, in terms of volume, there were 1,037 deals recorded witnessing an increase by 35 per cent over from a year-ago period (769 deals in 2018), 60 per cent of which were in the start-up space. Start-ups recorded a 61 per cent rise in terms of number of deals in 2019 as compared to last year (378 deals in 2018).
Though, there was a decline of three per cent in pure play PE/VC investments but there was a significant increase in investments in the infrastructure and real estate asset classes which recorded an increase of 225 per cent and 33 per cent, respectively, on a y-o-y basis.
In 2019, PE/VC investments recorded the highest ever value in the infrastructure sector with US$ 14.5 billion as compared to US$ 4.5 billion in 2018 while real estate received US$ 6.1 billion against US$ 4.6 billion in 2018.
Buyouts overtook growth capital deals for the first time and were recorded as the primary PE/VC deal type accounting for 34 per cent of all PE/VC investments by value in 2019. It recorded an increase of 56 per cent in terms of value with US$ 16.2 billion in 2019 as compared to US$ 10.4 billion in 2018.
In the last two years, buyouts received US$ 26.7 billion in deal value, which is more than the value of buyouts in the previous 12 years combined.
Also, there were 58 deals of buyouts in 2019 which are the highest ever. This was driven by significant increase in the value (180 per cent increase y-o-y) and number (123 per cent increase y-o-y) of buyouts in the infrastructure and real estate sectors. Buyouts in the traditional PE/VC space, though, decreased in both value (26 per cent decline y-o-y) and volume (19 per cent decline y-o-y) in 2019.
In 2019, growth capital investments increased by 9 per cent at US$ 14.5 billion against US$ 14.2 billion in 2018. This too was primarily on account of increase in growth investments in infrastructure and real estate sectors which witnessed a growth by 136 per cent (US$ 7.3 billion in 2019 against US$ 3.1 billion in 2018) in terms of value and 97 per cent in terms of volume (59 deals in 2019 against 30 deals in 2018) respectively.
Though, pure play PE/VC growth capital investments witnessed a decline of 26 per cent in terms of value and 13 per cent in terms of volume.
In 2019, investments in Start-up were the highest ever in terms of value and volume with US$ 7.9 billion as compared to US$ 6.5 billion in 2018. This was 22 per cent growth. OYO received US$ 810 million from Softbank, which was the largest start-up investment in 2019.
There were 111 large deals (value greater than US$ 100 million) recorded in 2019, accumulating to US$ 35.2 billion and accounting for 73 per cent of total PE/VC investments made in year compared to 81 large deals aggregating US$ 27.9 billion in previous year. The value and volume of large deals have been progressively increasing over the past four to five years.