Buyout deals dominated private equity (PE) and venture capital (VC) investments in India last year, hitting a record high in both volume and value.
In 2019, there were 58 transactions worth $16.2 billion, compared with 49 transactions worth $10.4 billion in 2018, which was the previous record, according to a report by the Indian Private Equity and Venture Capital Association and consulting firm EY.
In terms of overall investments, which also touched a record high of 1,037 deals worth $48 billion, buyout transactions held the largest share among PE/VC deals, compared to about 28% share in the previous year.
The growth in buyout deals was driven by the real estate and infrastructure sectors, which saw a 180% increase in value and 123% increase in the number of buyouts, compared to the previous year.
Growth capital investments, the second most preferred transaction type, grew 9% to $14.5 billion in 2019 on a year-on-year basis. The growth-stage deals were also driven by a spurt in growth investments in infrastructure and real estate sectors, which rose by 136% to $7.3 billion in 2019, compared to the previous year.
Startup investments also broke records in 2019 and were the highest ever in terms of value at $7.9 billion.
The primary contributor to the increase in startup investments was SoftBank’s $810-million infusion into Oyo (Oravel Stays Pvt. Ltd), which was also the largest startup deal in 2019.
In terms of sectors, infrastructure, accounting for investments worth $14.5 billion, contributed to 30% of all investments by value in 2019, compared to 12% in 2018, and more than the investments of the previous seven years combined.
The largest deals during the year included Brookfield’s buyout of Reliance Jio’s tower arm for $3.7 billion and Reliance Industries Ltd’s East-West pipeline for $1.9 billion. Brookfield-Reliance Jio’s tower deal was also the largest ever in the Indian PE/VC industry.