Private Equity Inflows Plunge Over 75% To $2.2 Billion In Q1

Private equity inflows plunged 75.4 per cent to $2.2 billion in the March quarter, making it the sixth consecutive quarter of decline, amid global macroeconomic and geopolitical headwinds, according to a report. At $2.2 billion of inflows, this is the lowest private equity investment in the country since 2018, when it stood at $1.7 billion, according to the data tabulated by the financial markets data and insights provider Refinitiv, an LSEG Business unit.

Internet-specific and computer software companies continued to attract the largest share of private equity capital, the report said. However, its share declined to 58 per cent from 75 per cent in the same period last year, primarily due to fewer deals. With turbulent market conditions and uncertainty, private equity fundraising activity also fell 41 per cent this year compared to the first quarter of 2022 and saw a 45 per cent decline sequentially.

On a sequential basis, the Q1 decline was 31.9 per cent year-on-year when it was $3.2 billion and 75.4 per cent annualised from $8.83 billion. In volume terms too, there was a fall as the total number of deals fell 19.9 per cent to 282 from 352 in Q4 of 2022 and by 30.9 per cent compared to 408 deals in Q1 of 2022, said Elaine Tan, the senior analyst at the agency.

Computer software and Internet-specific companies continue to attract maximum investor interest with $392.3 million, down 85.2 per cent from 88 deals, and $870.9 million in the reporting period, down 78.3 per cent. Inflows into the consumer-related sector fell 83.9 per cent and transportation plunged 72.3 per cent. However, industries catering to the energy and industrial sectors rose 361 per cent, and so did medical and health, which jumped 310.5 per cent. 

Similarly, PE fundraising also declined by 51.3 per cent to $2.58 billion in Q1 from $4.72 billion. The top ten deals in the quarter included Girnar Insurance Brokers ($149.6 million), Sona Blw Precision Forgings ($149.6 million), Biocon ($129.2 million), Mintifi ($110 million), Freshtohome Foods ($104 million), Gram Power India ($101.5 million), Finnovation Tech Solutions ($100 million), Sael Industries ($60 million), Tecso Charge Zone ($54 million), Silver Consumer Electricals ($48.4 million), Pan Healthcare ($48.3 million) and Ti Clean Mobility ($48.3 million).