TLDR:
- Venture capital and private equity investments in India dropped to $2.7 billion in July, a significant decrease from the previous month and year.
- The number of deals increased to 81, indicating smaller deal sizes.
Investments in Indian entities by venture capital and private equity funds sharply decreased to $2.7 billion in July of this year, according to a report released by the industry lobby group IVCA and consultancy EY. This amount was 42% lower than the previous month and 35% lower than the preceding year. The number of deals increased to 81 from 68, showing a trend towards smaller deal sizes.
The firm’s partner, Vivek Soni, mentioned that global uncertainties, inflation, and geopolitical tensions may influence investor confidence, leading to a cautious approach in deploying capital. While large deals over $100 million declined, buyout investments constituted the largest share, with $1.2 billion invested in five deals. Start-up investments increased by 31% to $729 million.
In July 2024, there were 16 exits totaling $2.5 billion, and funds secured $434 million for future investments. The report suggests that the sector may face challenges in the second half of the year, but the removal of the angel tax could stimulate investor interest in the start-up space.
