PE/VCs investment in India falls 44 pc to USD 3.5 bn: Report

Press Trust of India

Mumbai: Private equity and venture capital funds’ investment in the country continued to fall in May, with the overall values declining by nearly 44 per cent to USD 3.5 billion, a report said on Monday.

The dedicated funds had invested USD 6.2 billion in May 2022 and USD 7.4 billion in the preceding month of April 2023, representing a dip of 44 per cent and 52 per cent, respectively, as per the report by industry lobby IVCA and consultancy firm EY.

“Despite a recovery of sorts being seen in tech sector indices and some of the large global tech names, sentiment in India for tech sector investments has been lacklustre, and fundraising by Indian startups has been sluggish,” the firm’s partner Vivek Soni said.

There is a high level of dry powder with the funds courtesy of the large fundraises over the past oneand-a-half years, but most of them are “circumspect with deployment and are focusing significant efforts on managing existing portfolios that are struggling with maintaining growth and margin improvement”, he added.

Only healthcare and financial services have witnessed some investments, Soni said, adding that the medium- to long-term outlook remains positive and the overall deployments in 2023 will surpass the previous year’s number. In May 2023, the overall deal activity by volume stood at 71 transactions, 42 per cent lower than the year-ago period.