India private equity investments hit record high in 2020, report says

MUMBAI: Private equity investments in India rose 38per cent to hit a record high of US$62.2 billion in 2020 despite uncertainty caused by the coronavirus crisis, a private equity report showed on Wednesday.

Investors are optimistic about the fund raising environment for 2021, the report published by The Indian Private Equity and Venture Capital Association and Bain and Company showed.

Investments into Reliance Industries' Jio platforms and Reliance Retail totalled US$26.5 billion, making up 40per cent of the total deal value. Healthcare deals saw a 60per cent surge over 2019.

Saudi Arabia's state-run Public Investment Fund made the largest aggregate investments worth US$3.3 billion in three deals in 2020, while global private equity giant KKR made six investments totalling US$3 billion.

"Although overall investment activity remained muted from March to May due to COVID-led uncertainties, investor confidence recovered strongly in (the second half) to pre-COVID levels with late-stage and buyout deals witnessing increased traction," the report said.

There has been a steady rise in the number of active private equity funds in India in 2020.

Fund raising shrunk by 33per cent from 2019 levels across major Asia-Pacific markets, while India's share in the Asia-Pacific fundraising remained steady at 3per cent.

The report showed overall exit value in India declined by 30per cent year on year in 2020.

"Investor confidence has remained high, with India-focused dry powder holding steady at US$8 billion, and more than 90per cent of closed funds at target or oversubscribed," the report said.

"Going forward firms are optimistic about next year's fundraising environment," it said, adding that growing private equity confidence in India was increasing the size of deals and the range of sectors targeted.

(Reporting by Swati Bhat; Editing by Edmund Blair)