PE, VC inflows jump to $77 bn in 2021

Mumbai: Private equity (PE) and venture capital (VC) funds invested $77 billion in Indian companies in 2021, a jump of 62 per cent over the previous year, a report said on Tuesday.

Going by a number of deals, there was a 37 per cent growth to 1,266 transactions, the report by industry lobby IVCA and consultancy EY said. The year saw a massive glut of liquidity across the world coming out of the pandemic, which led to higher investments in many assets and a surge in valuations.

The consultancy firm's partner Vivek Soni said there was a pick-up in investments from early on itself, which surged in the second half of the year gone by. Investments in start-ups was a defining feature of 2021, with $28.8 billion in funding which accounted for 37 per cent of the overall PE/VC investments, the report said.

It added that the year also saw an addition of 44 unicorns or start-ups valued at over one billion, making India the third-largest home for such companies. One of the biggest reasons for the strong performance of PE/VC investments was the sharp increase in pure-play PE/VC investments or investments in sectors excluding real estate and infrastructure, which jumped 79 per cent to $67 billion in 2021, it said. After recording a significant decline amid the pandemic in 2020, buyouts recorded a strong rebound and were the second-largest deal type with $22 billion recorded across 63 deals, which is the highest ever by the quantum of value.

Private investment in public equity (PIPE) deals increased 46 per cent to $4.5 billion across 77 deals, while credit investments stayed put at $2.6 billion, it said.