PE, VC investments hit record high of $48 billion in 2019

New Delhi: Private equity and venture capital investments in the country touched an all-time high of $48 billion in 2019, according to an EY report.

The report titled 'PE/VC Agenda: India Trend Book 2020' said that this is the third consecutive year that the private equity and venture capital sector has outperformed.

"In terms of value, PE/VC investments increased by 28 per cent as compared to 2018, while the deal volume increased by 35 per cent. The growth was primarily driven by a significant increase in investments in infrastructure sector, which grew over three times compared to 2018," it said.

The report was released on Monday at the Indian Private Equity and Venture Capital Association (IVCA) conclave 2020. According to a report, while growth in traditional PE/VC investments dipped marginally in 2019, the growth in overall PE/VC investments was driven by investments in the infrastructure asset class.

"Investments in infrastructure sector accounted for 30 per cent of PE/VC investments by value compared to 12 per cent in 2018," it said. The report pointed out that largest deals in 2019 were also in the infrastructure sector including Brookfield's USD 3.7 billion buyout of Reliance Jio's tower assets and $1.9 billion investment in Reliance Industries East-West pipeline.

The largest deal in traditional PE/VC asset class was Alibaba and Softbank's $1 billion investment in Paytm, it said. The EY report said largest fund raise during the year saw government sponsor a $1.5 billion fund for providing last-mile funding to real estate developers for completion of stalled housing projects followed by Edelweiss Alternative Asset Advisors and Kotak Special Situations Fund raising $1.3 billion and $1 billion respectively to invest in stressed assets.

As per the report, PE/VC investments in infrastructure space were at $14.5 billion in 2019, which were higher than the cumulative PE/VC infrastructure investments received in the previous seven years. Almost 49 per cent of PE/VC investments in infrastructure in 2019 have been through the InvIT structure, it said.

For the first time in India, the report pointed out that buyouts have emerged as the largest PE/ VC investments deal type, overtaking the growth capital deals and accounting for 34 per cent of all PE/VC investments by value in 2019.