PE, VC investments fall 80% to a 19-month low in August

Investments by private equity and venture capital funds plummeted 80 per cent to USD 2.2 billion in August, a 19-month low, a report said on Tuesday. The month recorded the highest ever exits at USD 3.1 billion, making it the best month from sell-offs perspective, according to the report by industry lobby IVCA and the consultancy firm EY.

There were 83 deals in which USD 2.2 billion was invested by the PEs and VCs in August, which included five large deals which raked in USD 972 million for Indian companies, the monthly report said. The preceding month of July 2022 saw the venture funds investing USD 4.1 billion, while the same stood at USD 11.2 billion in August 2021.

The consultancy firm's partner Vivek Soni said Indian PE/VC investment flows have shown tepidness after being resilient during the initial part of the year and reached a 19-month low. "Investors are being more circumspect in making investment decisions and taking longer to close deals as the competitive pressures witnessed in the previous year have ebbed and the cost of capital has gone up," Soni said.

Most sectors recorded a sharp decline in investments in August, except for the healthcare sector which saw an increase of 485 per cent in PE/VC investments, he said. August 2022 has been the best month for exits in 2022, recording 25 exits worth USD 3.1 billion, a significant improvement over the previous month which recorded USD 322 million across nine deals.

However, it was significantly lower compared to August 2021, which recorded exits worth USD 7.4 billion across 42 deals, the report said. The month witnessed total fundraises worth USD 493 million by four funds, as per the report.