Private Equity/Venture Capital investments fall sharply in July to 2.7 billion dollars: Report

Investments in Indian entities by venture capital and private equity funds declined sharply to USD 2.7 billion in July this year, a report said on Wednesday. The bets were 42 percent lower than USD 4.6 billion in the preceding month of June, and 35 percent down from USD 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 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," the firm's partner Vivek Soni said.

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 USD 100 million each declined to six in July 2024 and the aggregate value of USD 1.5 billion was 58 percent lower compared to the year-ago period, the report said.

Buyout investments had the largest share in July 2024, with USD 1.2 billion invested across five deals compared to USD 2.9 billion across six deals in July 2023, it said, adding that start-up investments were up by 31 percent at USD 729 million to become the second biggest category.

The month recorded 16 exits worth USD 2.5 billion, as compared to USD 3 billion in July 2023 in 20 deals, it said. PE and VC funds raised USD 434 million for future investments during the month, which was broadly similar to June this year, but higher than the year-ago period.