India equity deals: Cash-rich investors are set to step up the hunt for Indian firms
Published On: Friday, July 30, 2021 | By: Team KnowMyStock
Cash-rich investors are set to step up the hunt for Indian firms, mainly tech start-ups, likely to benefit in the post-pandemic world, after pumping in a record $30 billion via public and private equity deals this year, analysts said. Global investors have flocked to online platforms in the country and helped swell the ranks of unicorns, or start-ups valued at $1 billion or above. The regulatory clampdown by China on its technology firms is spurring some foreign investors to turn to the world's second-most populous nation instead, analysts said. The fundraising boom in India by companies, ranging from an e-commerce platform to a food delivery app operator, comes even as the country's economic rebound, already weakened in recent months, faces risk from coronavirus variants.
In private equity capital deals, which include placements and pre-IPO funding rounds, $22 billion has been raised so far this year, according to Pitchbook data, putting India on track to exceed 2020's record of $37 billion.
Of the amount raised in 2021, foreigners invested $13.21 billion in the first half of this year - the most ever - compared with $4.99 billion in the same period last year, separate Refinitiv data showed.
In addition to that, there was $5.4 billion raised via 43 initial public offerings (IPOs) year to date, making it the busiest period ever, the Refinitiv data showed, up sharply from $1.24 billion during the same time last year.
Big ticket public offerings in the pipeline for the rest of the year include an up to $2.2-billion float by Indian digital payments firm Paytm, which counts China's fintech giant Ant Group and Japan's SoftBank among its backers.
"COVID has accelerated the existing trend towards digital consumerism, be that in food delivery, ecommerce or retail," said Gaurav Maria, JPMorgan's head of private capital markets in Asia Pacific.
"That trend in consumer behaviour is unlikely to reverse, which is why you're seeing tech-driven businesses coming to the fore ... Investors are looking to the long-term and are focused on whether these businesses are fundamentally sound."analysts said.
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