The year 2021 witnessed a record-breaking fund rush as a result of great resilience, technological insurgency, and innovation, which fuelled transaction activity. Following the United States and China, India is currently ranked third in the world for the number of unicorns. The Indian economy recovered far faster from COVID-19's second wave in April-June 2021 than it did from COVID-19's first wave the previous year. Start-ups continued to get a significant share of PE/VC funding, culminating in a five-year high in cumulative PE/VC investments in 2021.
The private equity sector has been mostly untouched by the significant impact of the COVID-19 second wave resulting in an increase in PE volume and value by 44% and 53% respectively on a year-over-year basis, As PE/VC's interest in pandemic-resistant sectors like technology grew, it led the charts in both deal volume and value. Private equity investors have had a good year unlocking their investments in 2021.
On a year-over-year basis, PE Exits volume increased by 32.89 percent, while PE Exit value increased by more than 3.07x. There were 202 agreements totaling $14.61 billion during the time, compared to 152 deals worth $4.76 billion in 2020.
On a year-over-year basis, mergers and acquisitions also saw an increase in deal volume and value of 26 percent and 9 percent, respectively. Domestic M&A activity has increased, with deals in a variety of industries accounting for the majority of the activity. The number of Equity Capital Market (ECM) deals increased by 40% year on year, but deal value decreased by 14%. The volume of Initial Public Offerings (IPOs) increased by 1.4x, owing mostly to liquidity and worldwide institutional investors eager to participate in India's technology enterprises.
To know more about all the developments in deal activity in private equity, venture capital, mergers & acquisitions and equity capital market deals in 2021, download the VCCEdge Annual Deal Report.