According to a study released on Tuesday, investments by private equity and venture capital firms fell by 80% to USD 2.2 billion in August, a 19-month low. According to research by industry lobby IVCA and consulting company EY, the month saw the highest-ever exits at USD 3.1 billion, making it the strongest month from a sell-off viewpoint.
According to the monthly report, PEs and VCs spent USD 2.2 billion on 83 acquisitions in August, including five sizable transactions that generated USD 972 million for Indian firms.
The amount invested by venture funds in the prior month, July 2022, was USD 4.1 billion, whereas it was USD 11.2 billion in August 2021. Indian PE/VC investment flows have demonstrated tepidness after being resilient throughout the early part of the year, according to Vivek Soni, a partner at the consultancy company, and have fallen to a 19-month low.
As the competitive pressures of the previous year have subsided and the cost of financing has increased, investors are becoming more cautious and taking longer to finalize agreements, according to Soni. Except for the healthcare industry, which witnessed a surge of 485% in PE/VC investments, other sectors had a steep fall in investments in August, he noted.
The greatest month for exits in 2022 has been August, with 25 exits totaling USD 3.1 billion, a considerable increase over the previous month’s USD 322 million over nine agreements. However, it was far less than August 2021, which saw 42 acquisitions totaling USD 7.4 billion in exits, according to the research. According to the data, four funds raised a total of $493 million throughout the month.
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