Private equity exits have picked up momentum in 2021 with May 2021 recording the second-best month ever with exits worth $12 billion.
According to the IVCA-EY monthly PE/VC roundup, May 2021 recorded investments worth $3.6 billion across 60 deals, on the back of nine large deals worth $2.7 billion. Exits recorded $12 billion across 18 deals, with three strategic exits worth US$10.4 billion.
Vivek Soni, Partner and National Leader Private Equity Services, EY said, 2021 has emerged as the second-best year for PE/VC exits after 2018 with exits worth $19.3 billion in the first five months. This is more than three times the total exit value recorded last year. Strategic exits have been the biggest driver of this rise, recording $12.7 billion so far as large well-funded corporates are taking advantage of the current environment to consolidate businesses/and or acquire online capabilities to enhance the value proposition of their existing brick and mortar businesses.
“We expect capital markets driven exits to increase meaningfully as a number of Indian ‘unicorns’ follow up on their IPO plans. Equity markets reaction to these maiden listings will be a bell weather event for the Indian start-up eco-system and could potentially fire up more investments as well as exit activity in 2021 and 2022”, Soni said.
May 2021 recorded 18 exits worth $12 billion, almost 42 times the value of exits in May 2020 (US$286 million) and almost 4 times the value recorded in April 2021 ($2.7 billion). This is the second highest monthly value of exits after the $16 billion recorded in September 2018 due to the Flipkart-Walmart deal.
Strategic exits in May 2021 were highest at $10.4 billion across seven deals which include the sale by CPPIB and Partners Group of their 90 per cent stake in Global Logic for $8.6 billion to Hitachi and the sale by Softbank of its 80 per cent stake in SB Energy for $1.8 billion (EV of $3.5 billion) to Adani Green Energy Limited (AGEL), which were also the largest exits in 2021.
Another major exit in May 2021 saw Carlyle sell a partial stake in SBI Life Insurance for $531 million.