Private investments increase 38% to $62 billion; PIF, KKR top investors

Private investments in India have increased by 38 per cent to a record $62.2 billion in 2020, thanks to the massive investments in Reliance Industries companies -- Jio Platforms and Reliance Retail. The RIL subsidiaries received an investment of $26.5 billion, which is around 40 per cent of total deal value, according to the India Private Equity Report 2021. 

The report published by Indian Private Equity & Venture Capital Association and Bain & Company said institutional investor PIF made the largest aggregate investments worth $3.3 billion in three deals in 2020. The global PE giant KKR made six investments, which is aggregately valued $3 billion. Silverlake invested $2.7 billion--- including $500 million in Byju's apart from Jio and Reliance Retail. GIC, Mubadala and ADIA invested $2.1 billion each. Excluding Jio Platforms and Reliance Retail deals, Blackstone and GIC were lead contributors at around $1.5 billion each.

Barring the Jio and Reliance Retail deals, the value was down by 20 per cent year-on-year as the volume of large deals of up to $100 million dipped by around 25 per cent in the country. Muted sentiment in the first half (January-June 2020) was followed by increased investor confidence in the second half, the report said. Top 15 deals in 2020 constituted around 40 per cent of deal value as against 35 per cent in 2019. 

Sectors such as consumer tech and IT/ITES maintained momentum throughout the pandemic, whilst healthcare witnessed high growth of around 60 per cent over 2019, said the report. "The consumer tech sub-segments of edtech, fintech, and verticalised e-commerce saw a surge in deals on the back of Covid-19-induced changes in consumer behaviour and market landscape," it added.

IT/ITES investments were driven by big-ticket investments in Tier 2 IT services. The Indian IT business of Virtusa received $2 billion investments. Real estate firm RMZ Corp received a $2 billion investment from Brookfield. Another real estate company, Vrindavan Tech Village, received $1.3 billion investment from Embassy REIT. When Bharti Airtel received $1.96 billion from global PEs, Byju's received $1.24 billion. In the manufacturing sector Piramal Glass received $1 billion from Blackstone. 

Within healthcare, companies in application programming interfaces (APIs), contract manufacturing and formulations received the highest traction from investors, thanks to risking of supply chain and domestic market resilience. BFSI faced a significant slowdown, with investments down by around 60 per cent due to high NPAs and the impact of loan repayment moratorium on bank balance sheets, the report said. 

The private investors' exit activity slowed in 2020 as owners held onto assets through turbulence, shifting focus to protecting value. In addition, exit activity was muted as most funds' portfolios did not reach maturity in 2020. The major exits were Carlyle and SBI from SBI Cards and Payment Services (value $1.4 billion), followed by Blackstone and Embassy Office Ventures from Vrindavan Tech Village (value $1.3 billion). 

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