Investors bet big on India’s growth story

Last year was tough for entrepreneurs worldwide as the Covid-19 pandemic wreaked havoc on businesses everywhere. But it hasn’t stopped global investors from cherrypicking opportunities and parking their money in Indian businesses which offer good returns. The numbers tell a story. According to management consulting firm Praxis Global Alliance’s latest report, in 2020, Indian companies recorded venture capital (VC) and private equity (PE) funding infusions worth a whopping $41 billion, which was spread across 831 deals.

Telecom, retail, and consumer apps and platforms were the top funded sectors last year, while amongst companies, Reliance Industries Ltd’s (RIL) technology and digital services arm (Jio Platforms) and its retail segment (Reliance Retail Ventures) were the most funded, the report noted. Praxis also pointed out that early- and growth-stage companies dominated the deal flow with 82% of the total deals in 2020.

Last year, Mukesh Ambani’s Reliance Retail Ventures Limited (RRVL) raised a staggering $6 billion in growth capital, while the oil-to-telecom conglomerate raised an eye-popping $20 billion for its digital services arm, Jio Platforms, in the months during the nationwide lockdown in 2020. There are as many as seven common investors between the retail and digital services businesses.

In the education technology space, Bengaluru-based Byju’s alone raised over $1 billion in equity funding last year.

However, the study also pointed out that the number of exits were lower last year at 148, worth $5.1 billion, down from 197 exits worth $9.2 billion in 2019.

“Indian private market is going strong with a record investment of $41 billion in 2020 despite Covid-19. India’s private equity and venture capital landscape has truly matured and has proven resilient in fuelling India’s economic growth,” said Madhur Singhal, managing partner and CEO, Praxis Global Alliance, adding that the report includes insights and data from over 125 PE/VC investors.

According to the report, investors expect technology and the Internet (consumer apps), healthcare, life sciences, SaaS, cloud, artificial intelligence, and analytics to become more attractive for potential funding institutions in the next few years.

The study further added that 43 Indian companies raised $3.6 billion in public markets last year compared to $1.8 billion in 2019.