PE investment subdued in India in first quarter of FY24;

Private equity investors avoid the market in the June quarter with the exception of one sizable transaction involving GIC and Brookfield REIT.

After touching the $2-billion mark in April-June last year, private equity (PE) investments dipped marginally by 5 per cent year-on-year in Q1 FY24 to $1.9 billion. — *There were no PE investments in well-known markets like Delhi-NCR and Bengaluru, which had recently been the centre of activity.*

INTRODUCTION

Private equity (PE) investments fell slightly by 5% year over year to $1.9 billion in Q1 FY24 from $2 billion in April to June of the previous year. There is a catch, even though the decrease in investment capital was minimal.

A closer examination of the most recent data released by Anarock reveals that, save from one significant transaction, PE activity in India remained largely subdued.

There were no PE investments in well-known markets like Delhi-NCR and Bengaluru, which had recently been the centre of activity.

Mumbai, one of the top commercial markets, had some PE activity with acquisitions totaling more than $400 million, accounting for 22% of all PE investments made during the quarter.

94% of the $1.9 billion total came from investments in equity, with the remaining 6% coming from debt.

74% of all PE investments made during the April–June quarter came from the $1.4 billion deal between Brookfield Asset Management’s PE fund and a group led by Brookfield India Real Estate Trust REIT and GIC. The average ticket amount increased 92 percent YoY to US$ 192 million in Q1FY24 as a result.

“Without this transaction, private equity activity remained muted because of the high interest rate environment and international uncertainty. In any case, foreign equity investments in office assets typically predominate in PE deals in Indian real estate.