Investments in local costs will remain strong
Bombay : Indian private equity and venture capital fund managers raised more than $4 billion in the first quarter of 2022, a sharp increase from previous quarters, indicating that private investment in local companies will also remain strong this year, following last year’s record investments.
Data from financial markets tracker Refinitiv showed fund managers raised $4.4 billion in the March quarter, more than triple from $1.23 billion in the December quarter, and also significantly higher than the $1.61 billion raised in the same period a year earlier.
Another IVCA-EY report pegged the fundraising amount at $4.6 billion this March quarter. Private equity and venture capital (PE/VC) investments and outflows are at all-time highs of $77 billion and $43.2 billion respectively in 2022, according to IVCA-EY.
“Momentum has been driven by several important factors, including a historically low interest rate environment, digital acceleration and transformation, and the growing depth of the startup ecosystem. Substantial capital is also waiting to be deployed. , as India-based private equity funds have raised $4.4 billion so far this year, more than double the amount raised from the first quarter of last year, driving fundraising activity of funds to more than $21 billion of 2019 in the first quarter of this year,” said Elaine Tan, senior analyst at Refinitiv, an LSEG firm.
Fundraising in the March quarter of this year was led by HDFC Capital’s affordable real estate fund which pocketed $1.8 billion, followed by the National Infrastructure and Investment Fund’s strategic opportunities fund, which took in $1.8 billion. raised $1.1 billion, according to Refinitiv data.
While these two funds were responsible for the bulk of fundraising during the quarter, activity was also seen across all sectors and thematic funds. The robust fundraising comes at a time when VC/VC investment in India remained strong despite several global macroeconomic and geopolitical headwinds during the March quarter. According to IVCA-EY’s monthly PE/VC roundup, the quarter saw investments of $15.5 billion, a 54% jump from a year earlier.
“Fundraising in the first quarter was fairly widespread across real estate, ESG and climate change themes, late-stage tech companies, healthcare as well as venture debt. For the remainder of the year, we believe that technology and technology-related investments will be the predominant theme for new private equity funds this year,” said Vivek Soni, partner and national leader, private equity services, EY.