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The IVCA-EY monthly PE/VC roundup – November 2020
The better the question. The better the answer. The better the world works. Our thoughts
Because of the large investments in the group entities of Reliance Group (Jio Platforms and Reliance Retail) that happened in 2Q and 2H2020, headline numbers for PE/VC investments “in 2020 till date have been far better than anticipated, 8% down from same period last year. However, if we were to exclude the Reliance Group entity deals, PE/VC investments in 2020 till date are at US$24.1 billion, 46% lower than the same period last year.
Sectors focused on essential goods and services like pharma, telecom, digital technology, edtech, etc. have received a major chunk of PE/VC investments while some of last year’s favourites like infrastructure, real estate and financial services have witnessed significant decline in investment flow. All deal segments recorded decline in PE/VC investments with buyouts being the most affected. Fundraising activity also saw a 31% decline between Jan- Nov 2020 as LPs remained focused on managing their larger public market portfolios and restricted their new commitments to tried and tested funds only.
Exits have reached a six year low, declining by 53% on a y-o-y basis to US$4.9 billion in the Jan-Nov period. While the public markets recovery has exceeded pre-COVID levels and are at all time highs, the catch up in mid caps and small caps has only begun in the last two months or so. Consequently, the IPO market has picked up momentum and we expect PE/VC exit activity to pick-up significantly in 2021 as secondary and strategic investments revive on the back of sustained demand revival and IPO’s of PE/VC backed companies.
Going forward, PE/VC investment activity in India can pick-up pace faster than expected if positive news emerges from the initial roll out of the various successful vaccines announced globally. On the whole, India’s economic indicators point to a faster than expected recovery# and we remain optimistic on sustained PE/VC investment and exit activity.
# India Economic Pulse - economic indicators and policy measures LP: Limited partner
Page 2 17 December 2020 EY analysis of VCCEdge data Could eliminating operational redundancies create more jobs? Discover powerful new ways for private equity to create unexpected paths to value. Year -to-date trend analysis: Jan-Nov 2020
The better the question. The better the answer. The better the world works. Key trends: Year-to-date
Investments
► On a year-to-date basis, PE/VC investments in 2020 between Jan-Nov declined by 8% in terms of value compared to same period last year (US$41.4 billion in 2020 vs. US$44.9 billion in 2019). Headline PE/VC investment performance in 2020 was significantly propped up by PE investments of US$17.3 billion in Reliance Group entities which accounted for 42% of all PE/VC investments in 2020. If we were to exclude these one-off PE investments in the Reliance Group entities, PE/VC investments in 2020 would be significantly lower at US$24.1 billion, a 46% decline compared to same period last year. In terms of volume, number of deals in 2020 for the Jan-Nov period declined by 11% compared to same period last year (852 deals in 2020 vs. 953 deals in 2019).
► One of the biggest reasons for the relative decline in PE/VC investments in 2020 (year-to-date) is the underperformance of the infrastructure and real estate sectors which attracted the highest PE/VC investment in 2019, at US$18.8 billion in the period Jan-Nov (US$20 billion for the full year), accounting for 42% of all PE/VC investments in 2019 (Jan-Nov). In 2020, these sectors have received only US$7.8 billion in investments till date, accounting for just 19% of total PE/VC investments. As a result, there has been a sharp decline in buyout activity as well, which has recorded a decline of 46% in terms of value and 40% in terms of volume. Infrastructure and real estate sectors accounted for 70% of all buyouts by value in 2019 in the Jan-Nov period.
► In terms of deal type, all deal types except growth deals have recorded significant drop in investments. As stated above, buyouts were the most affected by the slowdown in PE/VC deal activity. 2020 (Jan-Nov) recorded 35 buyouts worth US$8.7 billion compared to 58 buyouts worth US$16 billion during the same period in 2019. For the period under consideration, value of buyouts in 2020 are the lowest in the last three years. Growth deals were the highest with US$22.7 billion invested across 163 deals (US$13.7 billion across 211 deals during Jan-Nov 2019). The significant increase in value of growth deals is primarily on account of the US$17.3 billion invested in entities of the Reliance Group; else, even growth deals would have declined by 53%.
► Start-up investments too declined by 40% to US$4.5 billion across 530 deals (US$7.5 billion across 560 deals during Jan-Nov 2019). Private investment in public equity (PIPE) deals declined by 41% to US$2.9 billion across 53 deals (US$4.9 billion across 55 deals during Jan-Nov 2019). Credit investments declined by 10% to US$2.5 billion across 71 deals (US$2.8 billion across 69 deals during Jan-Nov 2019).
Page 4 17 December 2020 EY analysis of VCCEdge data Key trends: Year-to-date
Investments (cont’d)
► If not for mega investments in entities of the Reliance Group, YTD 2020 would have recorded a significant decline in both value and number of large deals (value greater than US$100 million). Between Jan-Nov, 2020 recorded 72 large deals aggregating to US$32.5 billion compared to 104 large deals aggregating to US$33.4 billion during the same period in 2019. 19 out of the 72 large deals in 2020 were on account of investments in Reliance Group entities (worth US$16.3 billion). In addition to the RIL Group PE investments, the other large deals in 2020 (year-to-date) include Brookfield’s acquisition of 12.5 million square feet of commercial space from RMZ Corp including its shared working space COWrks and Blackstone’s purchase of the rental income assets of Prestige Group for US$1.6 billion, on the real estate side. On the PE side, the largest deals were Thoma Bravo’s US$729 million buyout of Majesco Limited’s US business, Goldman Sachs and Varde Partners’ buyout of RattanIndia Power Limited’s debt for US$566 million and Baring PE Asia’s buyback of shares of Hexaware Limited worth US$565 million in its move to delist the company.
► From a sector point of view, in 2020 (Jan-Nov), almost all sectors recorded sharp decline in value invested. Telecom, retail, education and pharma were the only sectors to record increase in value invested. Moreover, these sectors also recorded their highest ever value of investments in 2020. Telecom was the top sector with US$10 billion invested across 13 deals (10 times increase y-o-y) mainly attributable to investments in Jio Platforms, followed by retail and consumer sector with US$6.5 billion invested across 42 deals (6.7 times increase y-o-y), on the back of large investments in Reliance Retail, financial services with US$4.6 billion invested across 135 deals (47% decline y-o-y), technology with US$2.4 billion invested across 131 deals (37% decline y-o-y), pharmaceuticals with US$2.8 billion invested across 33 deals (2.3 times increase y-o-y), technology with US$2.4 billion invested across 131 deals (37% decline y-o-y), and education with US$2.1 billion invested across 68 deals (2.7 times increase y-o-y). Infrastructure sector that received the highest value of investments in 2019 received US$3.4 billion across 26 deals in Jan-Nov 2020 (75% decline y-o-y).
Page 5 17 December 2020 EY analysis of VCCEdge data Key trends: Year-to-date
Exits
► For the period Jan-Nov, exits declined by 53% in terms of value in 2020 (US$4.9 billion vs. US$10.3 billion in 2019) and is the lowest value in six years for the period under consideration. In terms of volume, exits declined by 13% compared to 2019 (129 deals in 2020 vs. 148 deals in 2019). The decline was mainly due to fewer large deals.
► Exits via open market were the highest at US$2.3 billion (59 deals) in 2020 during the period Jan-Nov, 47% decline compared to same period in 2019. Exits via initial public offerings (IPOs) were second in line with US$1.1 billion recorded across four IPOs (US$247 million across seven IPOs during Jan-Nov 2019), which includes the US$1 billion SBI Cards partial exit by Carlyle. Exits via strategic sale recorded US$1 billion (42 deals) in Jan-Nov 2020, 39% decline compared to same period in 2019. Exits via secondary sale (sale to other PE funds) recorded US$167 million (15 deals) in Jan-Nov 2020, their lowest value in over six years.
► From a sector perspective, financial services recorded the highest value of exits during Jan-Nov 2020 (US$2.1 billion across 34 deals) accounting for 43% of all exits by value.
Fundraise
► The period Jan-Nov, 2020 saw US$5.9 billion in fundraise; 31% lower compared to same period last year (US$8.5 billion in 2019). There were only 12 fundraises of over US$100 million in 2020 (year-to-date) compared to 25 in the same period last year. The largest fundraise in 2020 saw Sequoia raise a US$1.4 billion venture fund for investments in India and Southeast Asia followed by Edelweiss Asset Management’s US$900 million fundraise for structured debt investments.
Page 6 17 December 2020 EY analysis of VCCEdge data PE/VC headline trends: Investments
US$m # US$m Total PE/VC investments 50,000 47,302 1,200 41,370 40,000 37,413 1,000 1,032 852 800 30,000 588 26,176 24,072 767 44,915 600 20,000 16,234 596 34,225 400 23,499 6,361 10,000 200 13,208 10,937 - 0 2016 2017 2018 2019 YTD 2020
Value (US$m) # of deals Investments between Jan-Nov Investments in Jio Platforms & Jio Fibre InvIT Investments in Reliance Retail
US$m US$m PE/VC investments: Split across asset classes 50,000
40,000 13,844 3,367 4,461 4,388 30,000 4,627 6,144 2,960 20,000 4,988 2,793 33,614 28,325 3,179 27,314 10,000 18,228 10,262 - 2016 2017 2018 2019 YTD 2020
PE/VC invetments (other sectors) (US$m) Real estate (US$m) Infrastructure (US$m)
Page 7 17 December 2020 EY analysis of VCCEdge data PE/VC headline trends: Exits
US$mUS$m Total PE/VC exits # 27,048 260 300 25,000 211 250 20,000 177 157 200 15,000 129 13,053 150 26,668 11,122 10,000 6,683 100 12,652 5,000 10,258 50 6,037 4,852 - 0 2016 2017 2018 2019 YTD 2020
Value (US$m) # of exits Exits between Jan-Nov
US$m US$m PE/VC exits: split across asset classes 1,088 25,000 711
20,000
15,000 491 807 25,249 243 10,000 925 126 763 11,755 91 5,000 9,953 955 5,795 3,805 - 2016 2017 2018 2019 YTD 2020
Other sectors (US$m) Real estate (US$m) Infrastructure (US$m)
Page 8 17 December 2020 EY analysis of VCCEdge data PE/VC headline trends: Fundraise
US$m Fundraise # US$m 11,687 12,000 100 10,000 90 8,092 8,000 80 5,774 5,865 70 6,000 4,313 56 51 60 4,000 44 41 50 2,000 40 4,122 4,946 6,652 8,465 38 - 30 2016 2017 2018 2019 YTD 2020 Total funds raised (US$m) Total # of funds raised Fundraise between Jan-Nov
Page 9 17 December 2020 EY analysis of VCCEdge data Year-to-date investments (excluding infrastructure and real estate)
Total investments (US$m) # of deals
2020 (Jan-Nov) 33,614 2020 (Jan-Nov) 800
2019 (Jan-Nov) 26,107 2019 (Jan-Nov) 841
Deal type US$m Deal type #
Credit investment 1,616 Credit investment 62 2,056 62
Buyout 3,034 Buyout 19 4,721 31
PIPE* 2,596 PIPE* 49 4,587 52 515 Start-up/Early stage 4,437 Start-up/Early stage 7,157 539 155 Expansion/Growth 21,931 Expansion/Growth 7,585 157
Deal size US$m Deal size #
>US$100m 25,640 >US$100m 59 16,513 66
US$50m-US$100m 3,399 US$50m-US$100m 46 3,460 45
US$20m-US$50m 2,275 US$20m-US$50m 69 3,258 93
US$10m-US$20m 932 US$10m-US$20m 62 1,435 101
* PIPE: Private investment in public equity Note: Deal value not available on 144 out of 841 deals in 2019 (Jan-Nov) and 110 out of 800 deals in 2020 (Jan-Nov) Page 10 17 December 2020 EY analysis of VCCEdge data Year-to-date investments: Infrastructure Total investments (US$m) # of deals 2020 (Jan-Nov) 3,367 2020 (Jan-Sept) 26 2019 (Jan-Nov) 13,288 2019 (Jan-Sept) 47 Deal type US$m Deal type # Credit investment 847 Credit investment 7 541 2 Buyout 1,824 Buyout 11 7,967 13 PIPE* - PIPE 1 151 1 3 Start-up/Early stage 57 Start-up/Early stage 206 6 4 Expansion/Growth 639 Expansion/Growth 4,423 25 Deal size US$m Deal size # >US$100m 3,088 >US$100m 10 12,423 21 US$50m-US$100m 65 US$50m-US$100m 1 539 7 US$20m-US$50m 163 US$20m-US$50m 4 218 5 US$10m-US$20m 33 US$10m-US$20m 2 71 5 * PIPE: Private investment in public equity Note: Deal value not available on one out of 47 deals in 2019 (Jan-Nov) and five out of 26 deals in 2020 (Jan-Nov) Page 11 17 December 2020 EY analysis of VCCEdge data Year-to-date investments: Real estate Total investments (US$m) # of deals 2020 (Jan-Sept) 4,388 2020 (Jan-Sept) 26 2019 (Jan-Sept) 5,520 2019 (Jan-Sept) 65 Deal type US$m Deal type # Credit investment 81 Credit investment 2 243 5 Buyout 3,825 Buyout 5 3,301 14 PIPE 275 PIPE 3 151 2 12 Start-up/Early stage 32 Start-up/Early stage 138 15 4 Expansion/Growth 175 Expansion/Growth 1,687 29 Deal size US$m Deal size # >US$100m 3,750 >US$100m 3 4,430 17 US$50m-US$100m 584 US$50m-US$100m 8 582 8 US$20m-US$50m US$20m-US$50m 309 9 US$10m-US$20m 17 US$10m-US$20m 1 104 8 * PIPE: Private investment in public equity Note: Deal value not available on eight out of 65 deals in 2019 (Jan-Nov) and four out of 26 deals in 2020 (Jan-Nov) Page 12 17 December 2020 EY analysis of VCCEdge data Year-to-date investments: Sector-wise Top sectors by value (US$m) Top sectors by # of deals 10,009 135 Telecom Financial services 933 175 131 6,496 Technology 137 Retail and consumer products 963 107 E-commerce 124 4,629 Financial services 68 8,796 Education 36 4,388 63 Real estate Food and agriculture 5,520 77 Media and entertainment 56 3,367 57 Infrastructure 13,288 46 Healtcare 42 2,827 Pharmaceuticals 42 1,254 Retail and consumer products 54 2,378 26 Technology Real estate 3,792 65 Pharmaceuticals 33 2,104 16 Education 777 26 Infrastructure 47 1,853 E-commerce 13 4,188 Telecom 8 6,865 106 Others Others 115 5,405 2020 (Jan-Nov) 2019 (Jan-Nov) Page 13 17 December 2020 EY analysis of VCCEdge data Top PE/VC investments PE/VC investments in Jio Platforms – Jan’20 - Nov’20 PE investors Stage US$m Stake (%) KKR Growth capital 1,512 2.32 Vista Equity Partners Growth capital 1,510 2.32 Public Investment Fund of Saudi Arabia Growth capital 1,497 2.30 Mubadala Investment Co. Growth capital 1,211 1.85 General Atlantic Growth capital 878 1.34 Tarrant Capital, TPG Capital Asia, L Catterton Management and Others Growth capital 849 1.32 Abu Dhabi Investment Council Growth capital 754 1.16 Silver Lake Management Growth capital 750 1.15 Silver Lake Management Growth capital 606 0.93 Intel Capital Growth capital 251 0.39 Qualcomm Ventures Growth capital 97 0.15 PE/VC investments in Jio Fibre InvIT – Jan’20 - Nov’20 PE investors Stage US$m Stake (%) PIF, ADIA Buyout 1,022 51 Page 14 17 December 2020 EY analysis of VCCEdge data Top PE/VC investments PE/VC investments in Reliance Retail – Jan’20 - Nov’20 PE investors Stage US$m Stake (%) Public Investment Fund of Saudi Arabia Growth capital 1,282 2.04 Silver Lake Management Growth capital 1,022 1.75 GIC, TPG Asia Growth capital 953 1.63 Mubadala Investment Co. Growth capital 846 1.40 KKR Growth capital 754 1.28 Abu Dhabi Investment Council Growth capital 751 1.20 General Atlantic Growth capital 498 0.84 Silver Lake’s co-investors Growth capital 254 0.38 Page 15 17 December 2020 EY analysis of VCCEdge data Top PE/VC investments Top PE/VC investments excluding infrastructure and real estate - Jan’20 - Nov’20* Company PE investors Sector Stage US$m Stake (%) Majesco Limited (US business) Thoma Bravo LP Technology Buyout 729 100 Hexaware Technologies Limited Baring PE Asia Technology PIPE 565 29 Natrol LLC (US unit of Aurobindo Pharma) New Mountain Capital Pharmaceuticals Buyout 550 100 General Atlantic, Owl Ventures, Tiger Think and Learn Private Limited (Byju) Global, Silver Lake Management and Education Growth capital 500 NA others J.B.Chemicals and Pharmaceuticals Limited KKR Pharmaceuticals Buyout 496 65 Piramal Pharma Carlyle Pharmaceuticals Growth capital 490 20 Credit ECL Finance Limited Farallon Capital and SSG Capital Financial services 400 NA investment Credit Piramal Enterprises Limited Farallon Capital Financial services 346 NA investment Edelweiss Global Investment Advisors, PAG Financial services Buyout 300 51 Edelweiss’ Wealth Management Nxtra Data Limited Carlyle Technology Growth capital 235 25 Sporta Technologies Private Limited Tiger Global Management, TPG, Media and Growth capital 225 NA (Dream11) ChrysCapital and others entertainment ICICI Bank Limited GIC Financial services PIPE 225 1 SeQuent Scientific Limited Carlyle Pharmaceuticals Buyout 210 74 CDC Group, Gaja capital, Baring PE Asia RBL Bank Limited Financial services PIPE 210 15 and others IndoStar Capital Finance Limited Brookfield and Others Financial services PIPE 202 40 * PE/VC deals excluding investments in Reliance Group entities Page 16 17 December 2020 EY analysis of VCCEdge data Top PE/VC investments Top infrastructure and real estate investments - Jan’20 - Nov’20* Company PE investors Sector Stage US$m Stake (%) RMZ Corp,12.5 million sq ft real estate Brookfield Real estate Buyout 2,000 >50 assets Prestige Estates Projects Limited, Rental Blackstone Real estate Buyout 1,600 >50 Income Assets Credit RattanIndia Power Limited Goldman Sachs, Varde Partners Infrastructure 566 NA investment CPPIB, OMERS Infrastructure IndInfravit Trust Infrastructure Growth capital 246 24 Management and others Shapoorji Pallonji Infrastructure, 5 solar KKR Infrastructure Buyout 204 100 assets (317 MW) Navayuga Road Projects Private Limited Edelweiss Alternative Asset Advisors Infrastructure Growth capital 150 NA (Two road assets) Credit ReNew Power Limited Development Finance Corporation Infrastructure 142 NA investment Acme Cleantech , 600MW solar assets Actis Infrastructure Buyout 127 100 Vatika Limited Goldman Sachs Real estate Growth capital 86 NA Golden Jubilee Hotels Private Limited Blackstone Real estate Buyout 82 100 * PE/VC deals excluding investments in Reliance Group entities Real estate includes deals across real estate (residential and commercial), hospitality and construction Infrastructure includes deals across roads, ports, railways, power and utilities, renewables and telecom infrastructure Page 17 17 December 2020 EY analysis of VCCEdge data Year-to-date exits: Analysis Total exits (US$m) # of deals 2020 (Jan-Nov) 4,852 2020 (Jan-Nov) 128 2019 (Jan-Nov) 10,258 2019 (Jan-Nov) 148 Exit type US$m Exit type # Open market 2,348 Open market 59 4,390 47 Secondary 167 Secondary 15 2,041 30 Strategic 1,026 Strategic 42 1,692 53 9 Buyback 210 Buyback 1,888 11 4 IPO 1,101 IPO 247 7 Top sectors by value US$m Top sectors by # of deals 2,083 Financial services Financial services 34 2,917 22 Real estate 955 578 Pharmaceuticals 11 5 Pharmaceuticals 364 251 E-commerce 9 315 9 Industrial products 158 Media and entertainment 8 264 6 Technology 1,661 8 220 Industrial products Retail and consumer products - 9 650 Others 59 Others 4,694 97 Page 18 17 December 2020 EY analysis of VCCEdge data Top exits Top exits - Jan’20 - Nov’20 Company Sector Sellers Buyer Exit type US$m Stake (%) SBI Cards and Payment Financial services Carlyle NA IPO 1,000 9 Services Limited Vrindavan Tech Village Embassy Office Parks Real estate Blackstone Strategic 524 100 Private Limited REIT Embassy Office Parks Real estate Blackstone NA Open market 302 9 REIT Paysense Services India Nexus capital, Naspers Financial services PayU Corporate Strategic 293 NA Private Limited and others Essel Propack Limited Industrial products Blackstone NA Open market 253 23 Crompton Greaves Retail and Consumer Electricals Advent, Temasek NA Open market 220 9 consumer products Limited Baring Asia Private Coforge Limited Technology NA Open market 119 6 Equity Computer Age Management Services Technology Warburg Pincus NA IPO 101 13 Private Limited Manappuram Finance Financial services Baring PE India NA Open market 101 5 Limited Metropolis Healthcare Healthcare Carlyle NA Open market 100 13 Limited Page 19 17 December 2020 EY analysis of VCCEdge data Fundraise Top fundraises - Jan’20 - Nov’20 Status Fund US$m Strategy Raised Sequoia Capital India Fund (2 Funds) 1,350 Sector agnostic Raised Edelweiss Asset Management III fund 900 Structured debt Raised Nalanda Capital 728 Sector agnostic Raised O2 Power (EQT, Temasek JV) 500 Renewable energy SAIF Partners (Elevation Capital) 7th Raised 400 Sector agnostic Fund Raised CDPQ, Piramal Partners 300 Credit financing Raised Lightspeed third India-focused fund 275 B2B & B2C early stage - sector agnostic Early/Growth stage -Deep-tech, consumer media, Raised Chiratae Ventures - Fund IV 184 software, fintech and health tech Raised Wipro Ventures 150 Early to mid-stage (Enterprise software) Page 20 17 December 2020 EY analysis of VCCEdge data Spotlight PE/VC investment trend during the pandemic (Apr-Nov) The better the question. The better the answer. The better the world works. Spotlight: Key trends during the pandemic ► PE/VC investments in India were already on a downtrend in the beginning of the year as the early spread of the pandemic in the developed markets had made PE/VC investors cautious. The initial uncertainty around the fatality of the virus and the ensuing fear caused global markets to record one of the steepest falls in history. ► The NIFTY50 index crashed from a peak of 12,201 in the beginning of February to a low of 7,610 by the end of March, almost a 38% decline in a span of around 40 days mirroring similar falls across global markets. A similar sentiment was also reflected in the private equity industry with investors either cancelling or postponing deals. ► The lockdowns that followed across most countries further added to the uncertainty and severely impacted the sales visibility of many businesses negatively and dampening their valuations while raising questions on sustainability of many others. ► In April-June, most large funds shifted focus from investments to portfolio management helping their portfolio companies tied over the crisis. As a result, deal flow came down to a trickle and if not for the mega investments in Reliance Group entities, PE/VC investments in India would have recorded a four year low of US$795 million in May 2020. ► Excluding the one-off investments in Reliance Group entities, during the period of the pandemic between Apr-Nov, PE/VC investments in India declined by 44% to US$19 billion compared to US$33.8 billion recorded last year. ► There was also a churn in the preferred sectors for PE/VC investments. Infrastructure sector, which was the largest sector in terms of deal value in 2019, recorded just US$2.3 billion between Apr-Nov 2020 compared to US$10.4 billion in the same period last year. ► E-commerce, pharmaceuticals and education were among the news sectors of interest recording over 50% growth in value invested. Page 22 17 December 2020 EY analysis of VCCEdge data PE/VC headline trends: investments (Apr-Nov) Total PE/VC investments trend US$m 8,464 # 120 8,000 100 6,898 85 83 93 100 79 80 76 5,444 5,288 72 73 78 85 6,000 80 61 4,385 3,890 3,857 4,000 66 60 2,387 2,468 1,708 4,917 2,230 40 2,000 888 1,138 4,649 3,303 1,282 1,776 20 1,022 - 349 0 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Investment in Jio Platforms and Value (US$m) # of deals Investment in Reliance Retail Jio Fibre InvIT Investment during the period Apr-Nov (including Investment during the period Apr-Nov (excluding investments in RIL Group) - US$m investments in RIL Group) - US$m 36,305 2020 17,298 19,007 2020 19,007 7% Y-o-Y 44% Y-o-Y growth de-growth 33,805 2019 2019 33,805 Deals by RIL Group account for 48% of PE/VC Includes US$10.4b investments in infrastructure investments in Apr-Nov’20 sector in 2019 vs. US$2.3b in 2020 Page 23 17 December 2020 EY analysis of VCCEdge data PE/VC headline trends: investments PE/VC investments trend (excluding investments in RIL Group entities) US$m # 120 8,000 100 100 79 80 76 80 81 88 5,288 72 73 85 6,000 76 5,161 80 57 64 4,000 3,541 60 2,387 2,468 2,608 1,708 1,981 2,230 1,555 40 2,000 1,138 888 795 20 - 0 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Value (US$m) # of deals Page 24 17 December 2020 EY analysis of VCCEdge data Analysis of PE/VC investments (excluding investments in RIL Group): Apr-Nov Total investments (US$m) # of deals 2020 (Apr-Nov) 19,007 2020 (Apr-Nov) 607 2019 (Apr-Nov) 33,805 2019 (Apr-Nov) 719 Deal type US$m Deal type # Credit investment 1,664 Credit investment 50 2,045 51 Buyout 7,369 Buyout 27 12,117 43 PIPE* 2,240 PIPE* 34 2,866 39 392 Start-up/Early stage 3,099 Start-up/Early stage 6,763 433 104 Expansion/Growth 4,635 Expansion/Growth 10,013 153 Deal size US$m Deal size # >US$100m 13,102 >US$100m 42 24,880 79 US$50m-US$100m 2,675 US$50m-US$100m 36 3,674 48 US$20m-US$50m 1,545 US$20m-US$50m 47 2,774 77 US$10m-US$20m 628 US$10m-US$20m 42 1,347 96 * PIPE: Private investment in public equity Note: Deal value not available on 106 out of 719 deals in 2019 (Apr-Nov) and 110 out of 627 deals in 2020 (Apr-Nov) Page 25 17 December 2020 EY analysis of VCCEdge data PE/VC investments during Apr-Nov (excluding investments in RIL Group): Sector-wise Top sectors by value (US$m) Top sectors by # of deals 4,069 114 RHC Financial services 4,030 142 106 3,562 Technology 114 Financial services 6,124 88 E-commerce 88 2,607 Pharmaceuticals 52 1,181 Education 29 2,198 49 Technology Food and agriculture 2,919 61 Media and entertainment 45 1,552 47 Education 690 37 Healtcare 35 1,328 E-commerce 30 3,318 Retail and consumer products 45 1,218 29 Infrastructure Business and professional services 10,418 25 Pharmaceuticals 27 669 9 Media and entertainment 481 Includes US$1.4 b 15 investments in InvITs RHC 42 515 Food and agriculture and US$3.7 b in RIL 17 645 Jio’s Tower arm Infrastructure 35 1,289 77 Others Others 92 3,998 2020 (Apr-Nov) 2019 (Apr-Nov) RHC: Real estate, Hospitality and Construction Page 26 17 December 2020 EY analysis of VCCEdge data PE/VC headline trends: exits (Apr-Nov) Total PE/VC exits trend US$m 19 19 # 3,000 20 16 15 12 13 15 2,000 11 9 9 10 9 10 10 5 1,000 1,490 5 329 864 1,105 286 288 974 461 117 564 134 67 527 - 0 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Value (US$m) # of exits Type of exits during the period Apr-Nov in 2020 – Exits during the period Apr-Nov - US$m Value US$m (volume) 1938 (46) 2020 2,956 67% Y-o-Y de-growth 629 (29) 2019 9,066 101 (3) 147 (5) 142 (9) IPO Buyback Strategic Secondary Open market Page 27 17 December 2020 EY analysis of VCCEdge data What will you invest in as investing changes? Monthly trend analysis: November 2020 The better the question. The better the answer. The better the world works. Key trends Investments ► PE/VC investments in November 2020 were 27% lower compared to November 2019 and 54% lower compared to October 2020 (US$3.9 billion in November 2020 vs. US$5.3 billion in November 2019 and US$8.5 billion in October 2020). The decline was mainly on account of fewer number of deals. November 2020 recorded 66 deals compared to 100 deals in November 2019 and 93 deals in October 2020. ► From the point of view of deal type, growth deals recorded the highest value of investments at US$1.8 billion across 13 deals, on account of the large investment in Reliance Retail. Buyouts were the second highest at US$1.4 billion across five deals followed by start-up investments worth US$693 million across 46 deals. ► November 2020 recorded nine large deals (deals of value greater than US$100 million) aggregating US$3.4 billion compared to 15 large deals worth US$4.2 billion in November 2019. ► From a sector point of view, retail and consumer products was the top sector in November with US$1.3 billion in PE/VC investments on the back of large investments in Reliance Retail. Page 29 17 December 2020 EY analysis of VCCEdge data Key trends Exits ► November 2020 recorded 19 exits worth US$974 million, 35% lower than the value of exits in November 2019 (US$1.5 billion) and 3.4 times the value recorded in October 2020 (US$288 million). Strategic exits in November 2020 were highest at US$601 million across ten deals. ► The largest exit in November saw Blackstone sell its stake in Vrindavan Tech Village Private Limitred to Embassy Office Parks REITs for US$524 million. Fundraise ► November 2020 recorded total fundraises of US$20 million compared to US$172 million raised in November 2019. Page 30 17 December 2020 EY analysis of VCCEdge data PE/VC monthly headline trends: Investments Total PE/VC investments trend US$m # 8,464 100 120 8,000 6,898 85 83 93 100 79 80 76 85 6,000 5,288 72 73 5,444 78 61 80 3,890 4,385 3,857 4,000 60 2,468 66 2,387 40 1,708 4,917 2,230 2,000 888 1,138 4,649 3,303 1,282 1,776 20 1,022 - 349 0 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Investment in Jio Platforms and Value (US$m) # of deals Investment in Reliance Retail Jio Fibre InvIT US$m PE/VC investments: Split across asset classes US$m 1 8,000 7,000 444 3,694 6,000 5 5,000 226 1,120 15 4,000 26 298 3,000 6,450 1,175 5,439 270 127 4,769 2,000 4,142 556 898 3,577 62 4,159 625 78 234 8 208 2,677 1,000 3 1,897 1,207 1,492 1,347 878 930 - Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 PE/VC investments (other sectors) (US$m) Real estate (US$m) Infrastructure (US$m) Page 31 17 December 2020 EY analysis of VCCEdge data PE/VC monthly headline trends: Exits Total PE/VC exits US$m # 19 19 3,000 20 16 15 12 13 15 2,000 11 9 9 10 9 10 10 5 1,000 1,490 5 1,105 527 864 134 288 974 461 329 117 286 564 67 - 0 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Value (US$m) # of exits US$m PE/VC exits: Split across asset classes US$m 3,000 2,000 89 1,000 1,490 348 524 1,016 302 516 - 117 134 2 527 129 461 329 286 262 450 - - 65 159 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Other sectors (US$m) Real estate (US$m) Infrastructure (US$m) Page 32 17 December 2020 EY analysis of VCCEdge data PE/VC monthly headline trends: Fundraise Fundraise US$m # 3,500 7 8 6 6 2,800 6 2,100 4 4 4 4 3 3 3 3,233 4 1,400 2 2 2195 2 700 1,476 - 172 742 603 85 - 50 121 480 93 20 - 0 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Total funds raised (US$m) Total # of funds raised Page 33 17 December 2020 EY analysis of VCCEdge data PE/VC investments: US$2,677 million over 62 deals (excluding infrastructure and real estate investments) Top sectors by value US$m Top sectors by volume RCP 1,305 Technology 12 E-commerce E-commerce 373 10 Financial services 7 Pharmaceuticals 227 Education 7 Education 209 Healthcare 6 Chemicals 150 RCP 5 Others 414 Others 15 Deal value US$m (volume) Deal type US$m (volume) 2235 (7) 1754 (12) 693 (46) 225 (3) 150 (35) 175 (2) 27 (2) 90 (3) 5 (1) NA * PIPE: Private investment in public equity RCP : Retail and consumer products Page 34 17 December 2020 EY analysis of VCCEdge data Infrastructure and real estate investments: US$ 1,180 million over four deal By value US$m By volume Real estate 5 Real estate 1 Infrastructure 1,175 Infrastructure 3 Deal value US$m (volume) Deal type US$m (volume) 1,157 (2) 1,157 (2) 5 (1) 18 (1) 5 (1) 18 (1) * PIPE: Private investment in public equity Page 35 17 December 2020 EY analysis of VCCEdge data Top PE/VC investments PE/VC investments in Reliance Retail: November 2020 PE investors Stage US$m Stake (%) Public Investment Fund of Saudi Arabia Growth capital 1,282 2.04 PE/VC investments in Jio Fibre InvIT: November 2020 PE investors Stage US$m Stake (%) PIF, ADIA Buyout 1,022 51 Page 36 17 December 2020 EY analysis of VCCEdge data Top PE/VC investments Top PE/VC investments excluding infrastructure and real estate in November 2020* Company PE Investors Sector Stage US$m Stake (%) Think and Learn Private Limited T. Rowe Price Group, BlackRock Education Growth capital 200 NA (BYJU’s) DST Global, Moore Capital Cars24 Services Private Limited E-commerce Start-up 200 NA Management, Unbound, Exor N.V. Biocon Biologics India Limited Goldman Sachs Pharmaceuticals Start-up 152 NA OmniActive Health Technologies TA Associates Chemicals Buyout 150 60 Limited Steadview Capital, Mirae Asset Zomato Private Limited E-commerce Growth capital 141 NA Venture Capital and others Norwest Venture Partners, Gaja Busybees Logistics Solutions Advisors, Investcorp Private Logistics Start-up 110 31 Private Limited Equity New Enterprise Associates, MindTickle Interactive Media Qualcomm Ventures, Canaan Media and Growth capital 100 NA Private Limited Advisors, Norwest Venture entertainment Partners, SoftBank and others * PE/VC deals excluding investments in Reliance Group entities in November 2020 Page 37 17 December 2020 EY analysis of VCCEdge data Top infrastructure and real estate investments Top infrastructure and real estate investments in November 2020* Company PE Investors Sector Stage US$m Stake (%) Two toll road projects of Essel NIIF Master Fund Infrastructure Buyout 135 100 Group * PE/VC deals excluding investments in Reliance Group entities in November 2020 Page 38 17 December 2020 EY analysis of VCCEdge data Exits: US$974 million across 19 deals in November 2020 Exits in November 2020 Exit by deal value US$m (volume) Exit by deal type US$m (Volume) 601 (10) Real estate 524 (1) RCP* 220 (1) 268 (5) Chemicals 88 (1) E-commerce 63 (4) 88 (3) NA 18 (1) Others 80 (12) IPO Buyback Strategic Secondary Open market * Retail and consumer products Page 39 17 December 2020 EY analysis of VCCEdge data Top exits Top exits in November 2020 Company Sector Sellers Buyer Exit type US$m Stake (%) Vrindavan Tech Village Embassy Office Real estate Blackstone Strategic 524 100 Private Limited Parks REIT Crompton Greaves Retail and Consumer Electricals Advent, Temasek NA Open market 220 9 consumer products Limited Baring Asia Private Coforge Limited Technology NA Open market 119 6 Equity Rustomjee’s subsidiary Real estate Xander Rustomjee Buyback 95 NA Kapstone Constructions OmniActive Health Chemicals Everstone TA Associates Secondary 88 35 Technologies Limited Page 40 17 December 2020 EY analysis of VCCEdge data Fundraise Top fundraise/announcements in November 2020 Status Fund US$m Strategy Announced Kedaara Capital Fund –III 1,000 Sector agnostic Announced 8i ventures 53 Consumer e-commerce and fintech Raised BlackSoil Capital Credit Fund – I 15 Structured debt Page 41 17 December 2020 EY analysis of VCCEdge data About EY Private Equity Services About EY’s Private Equity Services Practice EY has been working with the private equity industry for more than 25 years, with approximately 25,000 seasoned professionals worldwide dedicated to the industry and its business issues. EY serves 74% of the top 300 PE firms included in the Global PEI 300 firms list. Private equity firms, portfolio companies and investment funds face complex challenges. They are under pressure to deploy capital amid geopolitical uncertainty, increased competition, higher valuations and rising stakeholder expectations. Successful deals depend on the ability to move faster, drive rapid and strategic growth and create greater value throughout the transaction life cycle. EY taps its global network to help source deal opportunities and combines deep sector insights with the proven, innovative strategies that have guided the world’s fastest growing companies. In India, EY is among the leading providers of advisory, tax, transactions and assurance services. The organization is also the number one professional services brand* in India, which is a testimony to our relentless commitment to deliver exceptional client service and create a better working world. EY has offices spread across 11 cities in India. Worldwide, our 270,000 people across 150+ countries and 700+ cities are united by our shared values and their unwavering commitment to quality. ► EY’s India Private Equity Services Practice has been among the top advisors for private equity deals over the past ten years. EY has been awarded the “Most Active Transaction Advisor” award by Venture Intelligence for 2009-2013 and also the “Investment Bank of the Year, Private Equity” award by VC Circle in 2012 and 2017 and for M&A in 2018. EY was also the top PE advisor in the Venture Intelligence league table in 2018. ► EY’s India Private Equity Services Practice provides value to PE funds and their portfolio companies through its deep sector and service expertise. EY India is organized around key industry verticals in a matrix structure that enables us to offer an unparalleled blend of industry expertise and functional skills. We actively track about 15 sectors with sector leads driving our penetration in each of those sectors. Page 43 17 December 2020 EY analysis of VCCEdge data EY services for Private Equity We offer an array of services to Private Equity funds and their portfolio/investee companies through our various service lines. 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