PE/VC monthly roundup

Our monthly reports highlight the Private Equity/Venture Capital investment activity in India.

Key highlights of monthly trend analysis: October 2022

According to the IVCA-EY monthly PE/VC roundup, October 2022 recorded investments worth US$3.3 billion across 75 deals, including six large deals worth US$2.2 billion. Exits were recorded at US$1.6 billion across 15 deals in October 2022.

Investments

  • PE/VC investments in October 2022 recorded US$3.3 billion, 75% lower than PE/VC investments in October 2021 (US$13.1 billion) which had recorded the highest-ever monthly investments on the back of large deals.
  • In terms of the number of deals, October 2022 recorded 75 deals, a 43% decline y-o-y (132 deals in October 2021) and at par with deals in September 2022.
  • October 2022 recorded six large deals (deals of value greater than US$100 million) aggregating US$2.2 billion, a sharp drop from the 24 large deals worth US$11.3 billion recorded in October 2021.
  • From a sector point of view, healthcare was the top sector in October 2022, with US$977 million in PE/VC investments across three deals (US$245 million across six deals in October 2021).

Exits

  • October 2022 recorded 15 exits worth US$1.6 billion compared to US$5.2 billion in October 2021 across 25 deals and US$653 million recorded across 24 deals in September 2022.
  • Exits via secondary sale were the highest in October 2022, with four exits worth US$1.4 billion, propped up by the large secondary deal which saw Bain Capital purchase a 40% stake in CitiusTech for US$960 million from BPEA EQT.

Fundraise

  • October 2022 recorded total fundraises of US$2.2 billion, compared to US$70 million raised in October 2021. The largest fundraise was by Motilal Oswal, which raised its fourth fund of US$549 million, all raised from domestic high net worth individuals (HNIs) and family offices.

Spotlight: PE/VC credit investment deal trends

  • Globally, investors are diversifying their portfolios and seeking better returns by increasing capital allocations from traditional asset classes toward alternative asset classes. Private credit now accounts for about 12% of global private capital assets under management.
  • 2022 has emerged as India's best year for PE/VC credit investments, recording US$3.2 billion. Credit investments in 2022 to date are ~5% higher than the previous high recorded in 2019.
  • Amid rising interest rates and valuations continuing to remain high, credit has emerged as a good opportunity for PE/VC investors to capture value, with many companies looking to raise bridge funding as an alternative to raising equity at less-than-optimal valuation levels.
  • Post a spate of bad loans, traditional lenders have become risk averse while NBFCs are recovering from a liquidity crisis that engulfed them in 2018. This has left a void for private credit providers to capture.
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