The IBC and the recent NCLT resolutions have fundamentally altered borrower behavior.
Chennai: For infrastructure sector, 2019 could be a landmark year in terms of investments. In the first four months of 2019 itself, private equity and venture capital investments in infrastructure sector has surpassed the previous annual high of 2007.
Between January and April, investments totaling $3.7 billion were made in the infrastructure space, which was more than double of $1.8 billion invested for the entire year of 2018. In 2007, the sector had received investments worth $2.25 billion and this was the highest annual funding seen by the sector. The four-month investment of $3.7 billion is 64 per cent higher than this previous high. With eight more months to go and some large deals in the pipeline, 2019 will be a landmark year for PE/VC investments in the Indian Infrastructure sector, find EY's Private Equity monthly deal tracker. In April, the sector received $1 billion as investments.
As REITS and InvITs find acceptance with large, institutional investors, we project change in ownership of portfolios of real estate and infrastructure assets using REITs/ InvITs as one of the dominant trends for raising capital by real asset owners/developers in 2019, said Vivek Soni, Partner and National Leader Private Equity Services, EY.
"The IBC and the recent NCLT resolutions have fundamentally altered borrower behavior. With a creditor friendly regime firmly in place, owners of leveraged companies are increasingly looking towards PE funds for capital as they look to reduce leverage by either raising capital or by selling down controlling stakes in some of their diversified holdings. With this background and other enabling conditions like succession issues, we expect the strong showing by buyouts in 2018 to continue in 2019 as well," he added.
With the entry of large Limited Partners as direct investors in Indian PE/VC ecosystem, the country is witnessing growing investments in steady yield generating assets like Infrastructure and Commercial Real Estate. In 2017 and 2018, sovereign wealth funds and pension funds stepped up their investments in Indian Infrastructure and Real Estate.