Mid-stage investments will account for a major portion, once activity resumes: Zephyr Peacock India MD
In an interview with Business Line, Pankaj Raina, Managing Director, Zephyr Peacock India said, alternative investments sentiment will be subdued, funding will slow down by 30-40 per cent in 2020 and recovery is likely in the next 12-15 months.
Click here to read the full article on ‘Business Line’
Below is an excerpt from the post which first appeared on Business Line on 27 August 2020:
Given the outbreak of the Covid-19 pandemic, how would you rate institutional investor sentiment in the next 6-12 months?
Investor sentiment will be subdued and cautious. You will see institutional funding slowing down by 30-40 per cent over the next 6-12 months as compared to 2019. Investors in general would be more careful and follow a risk weighted approach to fund deployment. Existing portfolio companies will take top priority for most funds, with a firm focus on cash conservation to survive longer. Investors will also urge their portfolio companies to hire good quality talent at affordable CTCs, which will be more easily available in these trying times.
Funds will look to invest in businesses with lower cash burn and longer operating runways. Companies with sustainable business models which are unit economics positive, with good margin contribution profiles will take priority for investors. You will see a correction in valuations across the board, leading to higher shareholding for the investors, more governance rights, tracking KPIs actively instead of passively and seniority of rights vs existing investors.
