Mumbai, 20 November 2024: According to the IVCA-EY monthly PE/VC roundup, PE/VC investments in October 2024 were 40% higher than September 2024.
Vivek Soni, Partner and National Leader, Private Equity Services, EY said, “October recorded US$4.7 billion in PE/VC investments, 4% higher than investments in October 2023 and 40% higher than in September 2024. The number of deals in October 2024 was 21% higher year-on-year.
Pure-play PE/VC investments in October 2024 (US$2.7 billion) declined by 19% compared to October 2023 (US$3.3 billion) and declined by 6% compared to September 2024 ($2.9 billion). The real estate and infrastructure asset class saw a growth of 67% year-on-year (US$2 billion in October 2024 vs. US$1.2 billion in October 2023). In terms of the number of deals, pure-play and real estate and infrastructure asset classes grew by 18% and 40% year-on-year, respectively.
Credit investments were the highest deal type in October 2024 at US$1.8 billion, followed by growth investments at US$1.6 billion. From a sector point of view, infrastructure was the top sector in October 2024, recording US$1.8 billion, followed by technology (US$1.1 billion).
PE/VC exits were at US$1.1 billion across nine deals in October 2024, 40% lower than in October 2023 (US$1.9 billion). Secondary exits in October 2024 accounted for 96% of all exits by value (US$1.1 billion).
While the startup world is experiencing rapid growth, established and mature companies are experiencing a surge in interest due to their balanced risk-return profiles. These companies promise substantial returns in a shorter period and offer greater predictability compared to investments in early-stage companies. This makes them an attractive target for PE and VC investors looking to generate value from growth investing. Please refer to the spotlight section on Growth capital strategy for more details.
The last quarter of the year witnessed a strong start, with October PE/VC investments growing by 40% compared to September. However, rising inflation, rupee depreciation and the significant dip in 3Q2024 corporate earnings and ensuing earning downgrades are making investors adopt a cautious approach. The Trump 2.0 US administration brings with it its own share of uncertainties which will play out when the new US govt start articulating its policies in January 2025. Although the Indian equity markets have seen some correction, challenges around bid-ask spreads in private transactions remain. While we remain cautiously optimistic in the medium term, for the next 2-3 months, we project tepid PE/VC investment activity. On the exits front, PE backed IPO’s and open market exits are expected to reduce significantly if volatility in midcap-small cap space continues.”