PE and VC investment in India may hit record $ 70 billion
Private equity and venture capital investment in India will hit a new high of $ 70 billion in the 2021 calendar year, projections by Bain & Co show. Of this, about half has flowed into just two sectors: consumer technology that includes e-commerce, edtech and fintech, and IT services and software as a service.
Why it’s important: It’s not just value, but also volumes. The total number of investment deals in 2021 to date rose to 1,914, according to tracker VCCEdge. This is an increase of 35 percent from last year’s figure of 1,416, and far higher than in the non-Covid year of 2019, when it was 1,564.
Husband and wife team worth $ 586 million after MapmyIndia IPO
The start-up by Rakesh and Rashmi Verma met with resounding success on trading debut, and the stock rose around 35% to Rs 1,393.65 ($ 18.4), pushing the couple’s net worth to about $ 586 million.
Why it’s important: India’s start-ups are on a high, lifted by strong pandemic-driven demand for e-commerce and online services. Local businesses such as MapmyIndia have led the surge in new fundraisings, setting IPO records and gaining attention of investors looking for the next big market in Asia.
Snapdeal files for IPO to raise Rs 12.5 billion
Snapdeal, which once challenged larger rivals Amazon and Flipkart, has filed draft papers for an initial public offering. The Kunal Bahl-led e-commerce platform plans to sell new shares to raise Rs 12.5 billion through the IPO. Out the this, it will use Rs 9 billion to finance growth.
Why it’s important: Snapdeal was among the early startups in India to be crowned a unicorn or a startup valued at more than $ 1 billion. It raised close to $ 2 billion funding since its inception in 2007, according to VCCEdge.
Blackstone plans list India’s first retail properties investment trust
Blackstone Group, which was behind India’s maiden real estate investment trust (REIT), is now planning to list the country’s first retail properties-centred REIT by mid-2022 for a portfolio that is valued at $ 2.2-2.5 billion, or about Rs 165-187.5 billion. The US-based private equity firm is in the process of listing the proposed REIT by integrating and preparing its portfolio of mall properties across the country.
Why it’s important: The move comes in the backdrop of rising consumption levels, favorable demographics, and aspirational brands in India. It shows that Indian consumption story is still huge and the recent surge in retail footfalls due to revenge shopping post-Covid has emerged stronger than in western countries.
ZEE-Sony set to sign on dotted line for merger
Zee Entertainment Enterprises and Sony Pictures Networks India are close to signing definitive agreements to merge the two companies. Final negotiations had been completed and the deal could be signed in the early hours of Wednesday. As part of the proposed merger, the two companies had announced an investment of $ 1.575 billion by Sony Pictures’ promoters in the merged company for the majority stake
Why it’s important: The merger will create India’s second-largest entertainment network by revenue and spawn an entity with 75 TV channels, two video streaming services (ZEE5 and Sony LIV), two film studios (Zee Studios and Sony Pictures Films India) and a digital content studio (Studio NXT).
Sovereign wealth funds may invest in Reliance Industries’ clean energy arm
Sovereign wealth funds including Singapore’s GIC Holdings Pte Ltd, Abu Dhabi Investment Authority and Mubadala Investment Co of the United Arab Emirates are exploring investments in Reliance Industries clean energy unit. Chairman Mukesh Ambani had in June unveiled a Rs 750 billion push into clean energy over three years through Reliance New Energy Solar.
Why it’s important: There is growing interest in India’s green energy space as investors focus on environmental, social and governance goals in the backdrop of accelerating climate change. At the UN climate summit in Glasgow, India announced plans to increase non-fossil fuel power generation capacity to 500 GW by 2030.
State Bank’s private equity arm hikes climate fund’s target five times to Rs 20 billion
State Bank of India’s private equity capital arm has scaled up the target for its climate fund by five times to Rs 20 billion. The climate and environment-focused fund started off with a corpus of Rs 4 billion.
Why it’s important: The development comes on the back of growing emphasis on investments in clean technology and environment-friendly businesses. The State Bank, India’s largest lender, got good traction from global investors when it approached the market for commitment, which is why it has scaled up its target.
Omicron to slash economic growth by half in the three months to December
The global economy will expand just 0.7 percent in the final three months of 2021, half the pace of the previous quarter, and below the rate of around 1 percent seen right before the pandemic crisis, according to Bloomberg nowcast.
Why it’s important: Among emerging markets, China has weakened to a 4.5% rate this quarter, while Brazil has slumped to 0.2%. Russia, India, and South Africa also slipped. Accelerating inflation continues to cast a shadow over the world economy. This is true for India as well, which has seen significant inflation in retail and producer prices.
Stock market claws back after Monday mayhem
The stock market saw a strong rebound on Tuesday, a day after investors were hit by a sell-off on mounting fears of Omicron. The rise happened due to value-buying, positive global cues, and positive news on the efficacy of vaccines against Omicron. But sell-off pressure continued, and the indices pared more than half of the gains from the day’s high.
Why it’s important: Equities are expected to remain volatile in the short term. Market sentiment remains weak, and investors are eager to book profits at the earliest opportunity. The recent correct has hit retail investors the most.
Majority of urban Indians hurt by price rise
Nearly 60% of urban Indians said they were feeling the pinch of higher prices of essential goods and services such as transportation, housing, food and drinks, utilities, clothing and healthcare, according to a global survey by market research firm Ipsos.
Why it’s important: Rising inflation is a concern in India. If it persists, the Reserve Bank of India may tighten its easy monetary policy stance, making borrowing costlier. The State Bank of India has already raised its base rate.
