PE investments, exits in India likely to be delayed as COVID-19 plays spoilsport

Mumbai, India. Photo by Prerna Rajkumar on Unsplash

The disruption caused by covid-19 is expected to freeze private equity investments and exits, as investors focus on existing investments. According to private equity deal tracker Venture Intelligence, PE investments in India in the January-March quarter fell 36% year-on-year to $5.9 billion.

“Deal flow has slowed down materially, but there are old deals that we continue to evaluate. There are a few things in the pipeline that we are working on and we are trying to see how much progress one can make remotely,” said Vishal Nevatia, managing partner of PE firm True North.

The attention, meanwhile, is on helping portfolio companies survive the storm. “One of our priorities right now is to make sure that our partner companies prepare well and can survive if the lockdown continues. We are also doing stress tests to see how much additional equity capital we should keep ready for our partner companies in case the lockdown prolongs,” Nevatia said.

“This crisis will pass. Well-managed and well-capitalized businesses will have an opportunity to grow both organically and inorganically once things settle down,” he added.

While new investments are expected to slow down over the next few months, exits too are going to be tough amid falling valuations.

“In 2020, exit activity is expected to see a significant slowdown till there is a recovery in asset prices and economic activity,” said Vivek Soni, partner and national leader, private equity services, EY.

According to data from EY, in 2019, PE and VC exits added up to $11.1 billion, with open market sales contributing the biggest chunk of exits at $4.6 billion.

This article was first published on livemint.com.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.