Investment Destination: PE funds place their bets on Indian telecom

The telecom sector has attracted significant investments from private equity (PE) investors, over the years. These investors have contributed significantly to the sector’s growth by providing smart capital and improving capital efficiency. Further, PE investors have been not just providers of capital but also agents of change, by promoting new business models, backing entrepreneurs and encouraging the expansion of digital infrastructure. For instance, global PE companies such as Brookfield have been actively leveraging opportunities in the telecom domain since 2013 and also supporting the growth of new segments.

However, a drastic change in investor sentiment was seen in late 2019, owing to the onset of the Covid-19 pandemic. The majority of the industry stakeholders believed that the sudden onset of the pandemic would cast a huge shadow on investor appetite for investment in the telecom sector. Contrary to that view, the pandemic actually acted as a catalyst for investments in the sector, with telecom being among the highest gainers in terms of PE investments post the pandemic. According to a report by Praxis Global Alliance, PE and venture capital (VC) funds invested over $11 billion in the telecom sector during 2020 alone.