Investors bullish on health, education sectors in next 3-12 months

Private equity and venture capital investors are bullish on healthcare and education sectors despite India grappling with a slowing economy and the outbreak of Covid-19 which has disrupted almost all sectors, a survey has found.

About 82% investors think that the health sector will be high on the radar to receive investment in the next 3 to 12 months, said a survey conducted on 100 PE and VC companies in the last week of March by the Indian Venture Capital Association and consulting firm Praxis.

Whereas 74% of investors were bullish on the education sector. About 63% of investors think banking, IT and financial services will witness a rise in deal flow.

However, the majority of Investors, over 78%, think the current time is not a good time to make early-stage and capital growth investments, the findings of the survey said.

In last one year, PE and VC investments in India have also witnessed a downfall. Compared to March 2019, PE investments went down by 36% to $5.9 billion in March 2020 whereas VC investments in the same period fell by 22% to $1.7 billion.

Around 45% of investors believed that growth for existing portfolio companies for the next two years will remain lower as compared to FY20 whereas about 89% said that IPO or exit plans will have to be delayed.

Meanwhile, investors also suggested measures such as cost-cutting by startups to stay afloat during the ongoing crisis.

About 61% of investors recommended a cut in selling, general and administrative expense whereas 54% suggested downsizing the senior management.

In India, Covid-19 cases have breached the 9000-mark. Over the past few weeks, the spread of Covid-19 and the lockdown imposed to counter the spread has hampered trade, supply chains and investments in the country.