Bengaluru
Private equity and venture capital investments in April 2022 declined by 27% year-on-year to $5.5 billion due to a slowdown in large start-up investments, said an IVCA-EY report.
Venture capital investments in start-ups also declined by 50% y-o-y in April to $1.6 billion across 82 deals.
According to the IVCA-EY monthly PE/VC roundup, April 2022 recorded investments worth $5.5 billion across 117 deals, including 16 large deals worth $4 billion. Exits accounted for $1.2 billion across 13 deals, including six open market exits worth $483 million and one buybacks worth $330 million.
Vivek Soni, Partner and National Leader Private Equity Services, EY said, “April 2022 recorded PE/VC investments, 27% lower than April 2021 and 11% higher than March 2022. However, growth investments were back at the top at $2.8 billion after nine months with more than 2x growth y-o-y while monthly start-up investments recorded a 50% y-o-y decline.’”
The U.S. Fed has started tightening monetary policy with a 50 bps interest rate hike, and business risk premium/discount rates have gone up globally, which has had a significant negative impact on valuations of listed loss-making but growth-oriented start-ups, according to the report.
“This is expected to have a spillover effect on the private capital side as well. Both start-up valuations and deal closures could see some slowdown in the coming few months,” it further said.
Nonetheless, the IVCA-EY report said the overall PE/ VC investment flows in the Indian market would continue to remain strong amid global headwinds.
