PE/VC inflows fall 42% in July

Despite the increase in number of deals from 68 to 81 transactions, the bets were 35% down from $4.1 bn in July last year indicating smaller deal sizes

Deal Pipeline

♦ 6 large deals valued at over $100 mn each in July

♦ Aggregate value of $1.5 bn was 58% cent lower compared to yr-ago period

♦ With $1.2-bn in 5 deals, buyout investments had largest share

♦ Start-up investments up by 31% to $729 mn

Mumbai: Investments in Indian entities by venture capital (VC) and private equity (PE) funds declined sharply to $2.7 billion in July this year, a report said on Wednesday. The bets were 42 per cent lower than $4.6 billion in the preceding month of June, and 35 per cent down from $4.1 billion in July last year, the report by industry lobby grouping IVCA and consultancy firm EY, said. Interestingly, the number of deals increased to 81 from 68 transactions in the year-ago period, indicating the deal sizes were down.

The firm’s partner Vivek Soni, said: “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.” 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 per cent lower compared to the year-ago period, the report said.

Buyout investments had the largest share in July 2024, with $1.2 billion invested across five deals compared to $2.9 billion across six deals in July 2023, it said, adding that start-up investments were up by 31 per cent at $729 million to become the second biggest category. The month recorded 16 exits worth $2.5 billion, as compared to $3 billion in July 2023 in 20 deals, it said. PE and VC funds raised $434 million for future investments during the month, which was broadly similar to June this year, but higher than the year-ago period.