PE investments reduce

Geopolitical tensions and high interest rates are the causes
Report by Anarock reveals Private equity (PE) investments in the country have declined amid geopolitical tensions. According to Anarock report, PE investments have shrunk by 4% in the first six months of this year compared to the first half of last year, totalling $2.3 billion. Shobhit Agarwal, Managing Director and CEO of Anarock, stated that PE investments typically come from international and foreign investors, and current issues like high interest rates and geopolitical disputes are impacting these investments, leading to a decline.

However, he noted that the overall number of investments remains strong, with a solid presence of foreign investors in the Indian market, and an optimistic outlook is sustained due to investments from Reliance Retail, ADIA, and KKR. The average deal size has been increasing by 23% annually. PE investments were $1.2 billion in the first half of 2020-21, rising to $2 billion during the same period in 2021-22, then to $2.8 billion in the following fiscal year, and $2.4 billion in the April-September period.

The first decline in the last three years is observed in the 2024-25 fiscal year, primarily due to a significant warehouse deal among Reliance, ADIA, and KKR, which accounted for 67% of total investments in the first half of the current fiscal year. Industrial and logistics properties comprised 67% of total investments, while the office and residential sectors made up only 17%. Compared to last year, PE investments in the office sector have decreased by 79%, whereas investments in the industrial and logistics sectors have increased by 378%.