With the COVID-19 global outbreak and stipulation of lockdowns, the Indian PE/VC investments in 2020 are expected to be at US$19-26 billion, a reduction of about 45% -60% from the 2019 levels.
The COVID-19 pandemic has caused severe dislocations across markets, and with many countries under lockdown, economic activity has contracted significantly. The central government has extended the nationwide lockdown till 3 May and has indicated its inclination to permit resumption of some economic activity under strict guidelines in ‘green’ zones. However, there is still a lot of uncertainty around: 1) the future trajectory of COVID-19 in India, 2) a holistic understanding of its ramifications on the global and Indian economy; and 3) the near-term economic trajectory of the country.
While these uncertainties may continue to remain for some more time, our hypothesis is that there will be a significant reduction in Indian PE/VC investment and exit activity in 2020 as compared to the preceding year.