The ongoing second wave of coronavirus is affecting private equity and venture capital investments in terms of the deal numbers seen in April, a report by consultancy firm Ernst & Young (EY) and industry lobby Indian Venture Capital Association said.
Going by deal value, it noted, the PE and VC investments jumped to USD 7.5 billion in April, up 37 percent over March's USD 5.5 billion, and 6.5 times higher than the USD 1.1 billion registered in April 2020, during the national lockdown after the first wave,
April witnessed 67 deals as against 105 deals in March and 76 deals in April 2020, it added. "The sharp month-on-month decline in the number of deals could be due to investors becoming cautious on account of the rising second wave of COVID-19 infections in India," the report said. It can be noted that 20 states of the country have imposed lockdowns or near-lockdown measures following the jump in cases during the second wave, which had surpassed 4 lakh infections and 4,000 deaths a day recently.
Some analysts argue that the economic impact of this wave will not be as deep as the first wave because of the overall resilience. "New variants of the virus and the slow vaccine rollout are raising fresh concerns, which is also reflected in the sharp decline in the number of deals in April 2021 compared to the rising trend in the first three months.
Foreign portfolio investors: pulling out Rs 5,936 cr from Indian equities in May 1st week
India gives golden opportunity to buy gold, sovereign gold bond to go on sale from May 17
Forex reserves rise by $32.29 billion in six months, RBI gives good news