According to a survey from the sector, private equity investments in domestic companies plunged drastically year over year by 42% to USD 23.3 billion in 2022, which is the lowest level since 2019, when it was USD 15.8 billion. The figures depict the overall financial crisis that has affected both foreign investments overall and the startup sector specifically since the commencement of the Ukraine war in February.
According to Elaine Tan, a senior analyst at Refinitiv, the LSEG business arm that offers financial markets data and insights, private equity investment inflows into the country dropped sharply by 42% from the previous year to USD 23.3 billion. This was the lowest annual inflow since 2019 when it was a low USD 15.8 billion, but it was still relatively high compared to historical levels.
The number of closed deals for the year was not disclosed in the report.
According to the study, PE investments were USD 3.61 billion in the December quarter, down 8.1% from USD 3.93 billion and down 67.2% from USD 11.06 billion annually.
According to the data, there were 333 overall agreements in Q4 compared to 443 in Q3 and 411 in Q4 of 2021, a decrease of 24.8 percent and 19 percent, respectively.
The continued geopolitical unrest, rising interest rates, and worries about a recession in the Western economy, according to Tan, have made international investors wary of making investments.
Most of the financing has gone toward internet-specific software, transportation, and computer software, which together accounted for 66 percent of the overall spending for the year, or USD 8.58 billion.
The amount of money going into the Internet-specific business has decreased by 57.3 percent, and the number of deals fell to 528 in 2022 from 556 in 2021.
Financial services (down 34.6%), medical and health services (down 26.4%), computer software firms (46.4%), and financial services (down 34.6%) also saw financing tap decline from 2021 levels.
But when it comes to money inflows, the transportation-related businesses witnessed a 93% increase, the communications sector saw a 225.6% increase, and the agri/forestry/fish sector saw a 215.82% increase.
Tan anticipates that this tendency will persist as investors diversify away from China in the face of rising unpredictability, with India and Southeast Asia perhaps benefiting from this change.
Domestic PE funds contributed USD 13.7 billion of the total, up 163.2% from 2021 when they only contributed USD 5.21 billion. As a result, India-based PE fundraising activities totaled USD 32 billion — from 2019 to 2022. This pushes the sizeable money waiting to be deployed.
The top two dealmakers of the year were Think & Learn and VerSe Innovation, which each received USD 800 million from PEs. These two companies were followed by Bharti Airtel and Bundl Technologies, which each received USD 700 million, Tata Motors Electric Mobility, which received USD 494.7 million, Reliance Retail, which received USD 343.5 million, NTEX Transportation Services, which received USD 330 million, Delhivery, which received USD 304 million, and Busybees Logistics Solutions, which received
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