Investments by private equity (PE) and venture capital (VC) funds have declined by 42 per cent year-on-year (Y-o-Y) to $4 billion in November, a report said on Friday.
However, compared to the preceding month of October, investments have increased by 18 per cent. A report by industry lobby IVCA and EY, said, adding this is the second sequential rise in monthly investments.
"A significant gap in the bid/ask spreads was the main factor slowing down deal closure activity in 2Q (April-June) and 3Q 22 (July-September) as a result of which large deals got delayed and companies raised smaller rounds to minimise dilution," EY's partner Vivek Soni said.
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By the number of deals, November's 88 transactions were 15 per cent lower than the year-ago period and 13 per cent higher than the preceding October.
When looked at from a deal type perspective, buyouts were the highest in terms of value in November 2022 at $1.8 billion across four deals compared to $1.5 billion invested in five deals in November 2021, the report said.
From a sectoral perspective, infrastructure was at the top in November 2022, driven by investments in clean energy, with $1.6 billion in PE/VC investments across six deals, it said.
Soni said Fortune 500 companies' need for supply chain resilience has made a strong case for Indian manufacturing, and large global asset managers seem to favour India as they revise their emerging market allocations, which portends well for investment activity in the future.
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Rising global recession concerns, China's changing policy towards COVID and the geo-political climate remain the top three risks, he said.
November 2022 recorded 29 exits worth $1.8 billion compared to $3.1 billion in November 2021 across 21 deals and $1.6 billion through 15 such deals in October 2022.
It recorded a total fundraising of $1.9 billion compared to $610 million raised in November 2021, with Kotak Investment Advisors' $500 million for its 13th Real estate fund being the largest.
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