PE/VC deals plunge 54% in May to $2.8 b

Deal-making through the private equity/venture capital routes saw a sharp 54 per cent dip in May at a low USD 2.8 billion due to fewer large deals, according to a report. However, rainmakers are hopeful that the formation of a strong government can help the scenario.

There were 82 deals involving PE/VC investments of USD 2.8 billion in May, which is a 54 per cent decline year-on-year, EY India said Wednesday and attributed the fall to fewer large deals, as there were only five deals of over USD 100 million during the month. The dip comes amid data release of sagging GDP growth fuelled largely by a fall in consumption which has been one of the favourites for investors as well.

EY partner Vivek Soni, however, exuded confidence in deal-making picking up in the coming months on the back of the "decisive electoral mandate" and a "strong deal pipeline". Within the USD 2.8-billion fund inflows, buyouts were the largest category accounting for USD 1.4 billion.

From a sectoral perspective infrastructure was the top pick witnessing USD 900 million in investments, largely due to the USD 500-million deal involving GIC and Essel Infraprojects and also the USD 400-million GIC/KKR deal with India Grid Trust, it said. Investments by sovereign wealth funds and pension funds accounted for over 40 per cent of the total deals in the month, it said.

There was a sharp fall in exits as well, down 55 per cent in May at USD 739 million from the year-ago period.