PE Investments Rocket 43 Percent in Q1, up by USD 2Bn. Broad based growth in value and volume of deals
Apr 10, 2021
New Delhi [India], April 10 (ANI/BusinessWire India): As the effects of COVID-19 continue to unfold, the corporate world has witnessed unique trends in Private Equity, Mergers and Acquisitions and ECM space in Q1 of 2021.
As per VCCEdge research, Q1 of 2021 recorded an incline with 376 deals worth USD 6.6 billion when compared with the 350 deals recorded in Q1 2020. While the number saw an incline, the deals' value also increased by 43 per cent from USD 4.6 billion to USD 6.6 billion.
However, Q1 2021 also witnessed the lowest number of deals and deal value in the mergers and acquisitions space in the last five years on a Y-o-Y basis. The quarter recorded 184 deals worth USD 5.20 billion, a decline of 10 per cent and 65 per cent respectively as compared to Q1 2020. Domestic M&A dominated the show by garnering 118 deals worth USD 3.09 billion.
ECM deal activities saw an upward trend in the first quarter of 2021 as the quarter witnessed 26 deals for USD 4.61 billion, as against 18 deals worth USD 4.85 billion in Q1 2020. The major contributor for ECM deal activities were Initial public offering at 15 deals (USD 2.34 billion), followed by qualified institutional placement at 10 deals (USD 1.86 billion).
On the other hand, exits experienced a slowdown both in terms of deal activity and deal value for the fifth year in a row on a Y-o-Y basis. This quarter witnessed a decline of 30 per cent and 28 per cent in deal activity and deal value respectively when compared to the same period last year. There were 39 exits worth USD 1.51 billion in Q1 2021 as against 56 deals worth USD 2.08 billion. Open Market and Mergers and Acquisition is the major route adopted by investors for unlocking their investments.
The quantum of funds launched in Q1 2021 also came down by 9.5 per cent, when compared to Q1 2020, while the targeted capital witnessed a sharp increase of 4.6x (from USD 0.53 billion to USD 2.48 billion). The amount raised of Q1 2021 was USD 1.30 billion as against the USD 270 million in Q1 2020.
"Despite the economy slowdown, volatile and uncertain market, PE investors reiterated their confidence in Indian companies. This is evident from the fact that the first quarter of 2021 has received 43 per cent higher funding as compared to the same period last year. Investors are now looking for companies which are agile, adaptable and at the same time focussing on bringing solutions to the real problems. In 2021, investors will remain bullish in tech-enabled companies and more and more deals can be seen in this space," said Shalil Gupta, Chief Business Officer, Mosaic Digital - An HT Media Group Company.
The EdTech space also witnessed an inflow of funding for Byju's. Think and Learn Pvt. Ltd. (Byju's) raised USD 460 million funding from MC Global Edtech Investment Holdings LP, B Capital, Baron Emerging Market Fund, Baron Global Advantage Fund, XN Exponent Holding, Arison Holdings, TCDS (India), and TIGA (India). This round takes byju's post-money valuation to a little over USD 13 billion.
Another interesting deal that put Sporta Technologies (Dream11) at centre stage was the funding raised by them. Sporta Technologies (Dream 11) raised USD 400 million from Steadview Capital Master Fund Ltd., Tiger Global Management LLC, TPG Tech Adjacencies, LP, ChrysCapital Investment Advisors India Pvt. Ltd., Footpath Ventures SPV I LP, TCMI, Inc., D1 Capital Partners LP and Falcon Edge Capital LP.
With the highest number of deals recorded and dramatic changes in workplace requirements, Information Technology sector is the one to watch. The sector witnessed 214 deals worth $3.32 billion.
Much activity is expected on all fronts ranging from IT to EdTech and to even gaming, making 2021 a year to watch!
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