Stiff competition in PE/VC fund landscape as more players join in
The competitive landscape for private equity (PE) and venture capital (VC) funds is getting more intense, with the number of players going up to grab a piece of the pie.
According to 'India Private Equity Report 2025', released by Bain & Co and Indian Private Equity and Venture Capital Association (IVCA) on Tuesday, the number of PEs involved in deals in India has gone up by over 60-65 per cent between 2016, when there were between 100 and 110 funds, to as many as 170-180 funds in 2024. It represents a CAGR (compound annual growth rate) of 6-7 per cent in the last eight years.
India continues to attract strong investment from global investors. As much as 90 per cent of the top 30 global funds, based on assets under management (AUM), have an active presence in India and their number is already growing.
In 2024, global funds accounted for 50-55 per cent of the total number of funds, from 40-50 per cent in 2016. At the same time domestic funds are also flexing their muscles — they account now for 40-45 per cent of total PE funds. The rest are with government-linked funds.
Not only that fundraising is increasingly becoming more competitive, with limited partners (LPs) prioritising past fund performance as one of the key drivers of new investment. A survey done for the report shows that 56 per cent of the funds surveyed in India said that LPs now demand a stronger track record, making past performance a critical factor in getting follow-on funding.
Despite that, by the close of 2024, India-focused funds accounted for 10 per cent of all the funds raised in that year in the Asia Pacific region, up from 7 per cent in 2016. However, in the same period, pan-Asia funds, which have a substantial allocation for India, have gone up from 36 per cent to 57 per cent.
The other clear trend is that PE investors are increasingly gravitating towards buyouts. As a result, the share of buyouts in overall PE deal-making has gone up sharply from 37 per cent in 2022 to 51 per cent in 2024. This trend reflects a strategic focus on acquiring controlling stakes in high-quality assets across sectors, driven by accumulating dry powder.
To look at the trend from another perspective, small buyouts ($250 million and below) continued to gain share, making up to 68 per cent of all buyouts in 2024 compared to only 55 per cent in 2023, and 40 per cent in 2022. Buyouts in the $500 million-1 billion category have also risen from 9 per cent in 2023 to 14 per cent in 2024 across all such deals.
As far as 2025 is concerned, the report says that ageing assets held by PE and VC funds for a longer period of time are expected to accelerate buyout deals.
Data shows that buyout deals of over $100 million in which PEs exited within five years have shown a marked decline — they went down from 46 per cent for deals done in FY16 to only 37 per cent for deals signed up in FY19.
The percentage of deals in which PEs realised their entire returns went down declined from 38 per cent to more than half at 17 per cent in the same period. In simple terms, it means that in 2025, nearly 83 per cent of deals that are over five years old could come up for exits, partial or complete, giving a big push to exits.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
34 minutes ago
- Mint
FPIs return to India, but will they stay? A crucial event hangs heavy
Foreign portfolio investors (FPIs) have flocked back to Indian equities after a spate of massive selling. FPIs were buyers of Indian stocks for the third consecutive month in May, investing ₹27,000 crore in April-May, according to National Securities Depository Ltd data. But will they stay? It depends. In June so far, FPIs have been buyers of Indian stocks worth ₹2,480 crore. However, this fund inflow momentum may face near-term turbulence. 'For the next one month, we expect FPI flows into Indian equities to remain volatile," said Shrikant Chouhan, head of equity research at Kotak Securities Ltd. So far, in June, FPI flows into emerging markets have been mixed. Brazil, Philippines, South Korea, and Vietnam witnessed inflows of $102 million, $10 million, $1803 million, and $6 million, respectively; Indonesia, Malaysia, Taiwan, and Thailand witnessed outflows of $288 million, $68 million, $1,264 million, and $30 million, respectively, he added. Also Read: Gold, stocks and FPIs: What the market crystal ball foretells for the next three months Will FPIs stay? There could be jitters among market participants as the 90-day pause period on reciprocal tariffs by the US ends on 9 July. The contours of a trade deal between India and the US are crucial and could have a bearing on the trajectory of FPI flows. 'Our base case scenario is that India and the US would reach a trade agreement within the deadline, and going by the UK-India deal, a minimum threshold of 10% is likely on merchandise exports between the US and India as well," said Gaura Sen Gupta, economist at IDFC First Bank. Once this event is out of the way, concerns that tariff tantrum could spill over from merchandise/goods to services are likely to get allayed, given that India's economic growth is largely services-driven. 'If an incremental tariff of 10% is levied on Indian merchandise export, then we see 20 basis points negative impact on India's gross domestic product growth," she added. Even so, since India's growth is more domestically fueled than many Asian counterparts who are more reliant on goods exports, it is likely to be relatively less affected by global trade slowdown. Further, the Reserve Bank of India's higher-than-anticipated pro-growth stance could also buoy FPI flows. RBI cut repo rate and cash reserve ratio by a higher-than-expected 50 basis points and 100 bps, respectively, in June. Its impact on domestic consumption revival is expected to come with a lag in the second half of the year. And that's not all. 'We see the Indian rupee getting support from RBI's interest rate cuts and liquidity boosting measures, lower oil prices and manageable fiscal deficit. In addition to equity returns, the reducing currency risk is a positive catalyst for FPI flows," said Chakri Lokapriya, chief investment officer (equities) at LGT Wealth India. 'Our analysis shows that overall FII exposure to EMs is around 30%, and from that, around 18-19% is into India; this can increase if macros remain stable," he added. Also Read: FPI jitters: Are foreign investors losing confidence in Indian markets? US-China truce On the flipside, recent US-China trade truce could also lead to rotation of flows into China. Plus, India's expensive valuations could limit a huge improvement in FPI flows. At one-year forward price-to-earnings, the MSCI India is trading at a multiple of 20x, a step premium to MSCI Emerging Markets and MSCI Asia Ex-Japan indices, showed Bloomberg data. For valuations to justify, corporate earnings have to show a meaningful and broad-based improvement. There were no fireworks in the recently concluded Q4FY25 and FY25 result season. Earnings downgrades continued on looming worries of muted urban consumption demand and margin pressures. 'While we expect FPI inflows in FY26 into Indian markets to improve from FY25 levels, a steep jump is unlikely. In a risk-off scenario, it would be difficult for emerging markets EMs including India to attract huge FPI inflows," added Sen Gupta. Also Read: US rejects India again at WTO: Response to auto tariffs plea mirrors rejection over steel, aluminium dispute
&w=3840&q=100)
First Post
an hour ago
- First Post
Indo-Canadian ties under Carney: Is it a new beginning?
Mark Carney replaced Justin Trudeau as Prime Minister in March 2025 in what is hoped could be a turning point in Canada's relations with India read more Prime Minister Narendra Modi is all set to visit Canada for the G7 Summit in Kananaskis, Alberta, from June 15 to 17, 2025. Canadian Prime Minister Mark Carney was recently asked by the media why he had invited India's Prime Minister for the G7 Summit, given the strained relationship between the two countries. In a brief reply, Carney said: 'There are certain countries that should be at the table for those discussions in my capacity as G7 chair consultation.' He added, 'India is the fifth largest economy in the world, effectively the most populous in the world, central to a number of supply chains, so it makes sense. And in addition, bilaterally, we have now agreed importantly to continued law enforcement dialogue so there's been some progress. I extended the invitation to Prime Minister Modi in that context and he has accepted.' STORY CONTINUES BELOW THIS AD India-Canada relations had sunk to the rock bottom because Justin Trudeau had allowed a wide range of anti-India activities to be carried out by extremist Sikhs who constituted his vote bank. It was clear that as long as Justin Trudeau remained in power, there would be no hope for the improvement of India-Canada relations. It was felt that if was ousted from the prime ministership, Indo-Canadian relations stood some chance of improving. Mark Carney replaced Justin Trudeau as Prime Minister in March 2025 in what is hoped could be a turning point in Canada's relations with India. He assumed office at a time Canada was in the midst of an escalating trade war with the US and existential threats from President Donald Trump. During a media interaction in Calgary a few days before being sworn in as Prime Minister, Carney had said: 'What Canada will be looking to do is to diversify our trade relationship with like-minded countries. And there are opportunities to rebuild the relationship with India. There needs to be a shared sense of values around that commercial relationship. If I'm Prime Minister, I look forward to the opportunity to build that.' Striking a conciliatory tone, India also said that it hopes to rebuild ties with Canada based on 'mutual trust and sensitivity' and blamed the downturn in bilateral relations to the 'licence that was given to extremist and secessionist elements' in Canada. In a notable step toward repairing the bilateral relationship, India's External Affairs Minister S. Jaishankar recently held a phone conversation with Canada's new Foreign Minister Anita Anand on May 26, 2025. They focused on deepening the bilateral economic ties and advancing shared priorities. Their dialogue, the first of its kind following the recent shift in Canada's political leadership, is a promising sign of renewed engagement between two countries that have long shared educational, economic, and cultural bonds. Anand said that the discussion was productive, adding that she looked forward to 'continuing our work together'. STORY CONTINUES BELOW THIS AD The Jaishankar-Anand conversation is more than a political formality—it's a strong signal to students, families, universities, and businesses that India and Canada are ready to turn the page under Mark Carney's leadership. Ottawa and New Delhi can gain significantly by working together to address shared challenges in today's shifting global order. For this, both countries need to work closely in order to move past the diplomatic turbulence of recent years. The invitation extended by Carney to Prime Minister Modi is a further signal by Canada of its willingness to work in that direction. It is hoped that this fresh engagement under Canada's new Prime Minister signals a strong intention to stabilise ties, restart cooperation, and rebuild trust between the two nations. India and Canada are both influential members of the Commonwealth, G20, and active voices in international affairs. Restoring strong bilateral ties can have a ripple effect over several areas such as the Comprehensive Economic Partnership Agreement (CEPA), collaboration on clean energy, climate finance, and technology startups, education and stronger people-to-people ties. STORY CONTINUES BELOW THIS AD There have been suggestions by political analysts in Canada for quite some time that it must end tensions and instead find constructive ways to strengthen the partnership and diversify trade with India, which is a rising power and is set to play an increasingly influential role in the evolving geopolitical and global economic landscape. However, this is easier said than done because there is a long-standing and deep-seated mistrust between India and Canada, fuelled by a number of factors, including the 1985 Air India bombing tragedy in which 329 people were killed, mostly Canadians of Indian origin. India's view is that Canada failed to prevent the attack, mishandled the investigation, and responded with insufficient empathy and accountability. Disagreements over the Sikh separatist Khalistan movement have also contributed to the tensions, particularly with Prime Minister Trudeau's perceived support for the movement. The relationship deteriorated sharply in September 2023 when Justin Trudeau said in a speech before the House of Commons that 'Canadian security agencies have been actively pursuing credible allegations of a potential link between agents of the Government of India and the killing of a Canadian citizen, Hardeep Singh Nijjar'. Trudeau also said :'Any involvement of a foreign government in the killing of a Canadian citizen on Canadian soil is an unacceptable violation of our sovereignty. It is contrary to the fundamental rules by which free, open and democratic societies conduct themselves'. STORY CONTINUES BELOW THIS AD Some Canadian politicians, including Justin Trudeau have been criticized for appearing at Sikh diaspora events where those who advocate violence are celebrated. This has further fuelled a deep-seated skepticism among Indian policymakers about Canada's commitment to combating violent extremism. The allegations by Canada that the Indian government was involved in the assassination of Hardeep Singh Nijjar, a prominent Khalistani leader, have further escalated the diplomatic row. This distrust extends to both sides, with India accusing Canada of sheltering and supporting anti-India terrorists, while Canada accuses India of interfering in Canadian affairs. The downturn in bilateral relations was swift. Both countries expelled members of each other's diplomatic staff and advised their citizens against traveling to the other. In the midst of escalating tensions, Canada closed three consulates in India. The crisis further deepened a year later when Ottawa accused Indian diplomats of being complicit in criminal activities, including intimidation, extortion, and murder. New Delhi rejected these claims, labelling Canada a 'safe haven' for extremism and anti-India activities. India withdrew its High Commissioner from Canada and some other diplomats, saying 'We have no faith in the current Canadian Government's commitment to ensure their security. Therefore, the Government of India has decided to withdraw the High Commissioner and other targeted diplomats and officials'. India also expelled six Canadian diplomats. STORY CONTINUES BELOW THIS AD From India's point of view, the most significant challenge in Canada-India relations stems from what it perceives as one of its gravest national security threats: Khalistani extremism on Canadian soil, a movement that advocates for an independent Sikh state, Khalistan, to be carved out of the Indian state of Punjab. Canada must engage in a serious discussions and address India's concerns. The participation of the Director of the Canadian Security Intelligence Service (CSIS) at the recent conclave of intelligence chiefs from around the world, held on the sidelines of the Raisina Dialogue on 17-19 2025 March, 2025 in New Delhi was a welcome development. If the Joint Working Group on Counter Terrorism meets regularly, this could serve as an effective platform for collaboration in this important security-related area. Addressing security-related concerns is very important for unlocking the economic potential of the relationship. Canada and India's bilateral trade relationship has seen fluctuating growth. In FY 2022-23, the bilateral trade was around US$ 8.27billion, while in FY 2023-24 it grew marginally to US$ 8.37, largely because of increased imports by India from Canada. While there's a significant potential for growth, ongoing political tensions have impacted the strengthening of economic ties. STORY CONTINUES BELOW THIS AD Negotiations for a Comprehensive Economic Partnership Agreement (CEPA) began in 2010 but have been stalled since 2021. In 2022, the focus shifted to a more limited Early Progress Trade Agreement (EPTA), but these talks were paused in September 2023, shortly before Prime Minister Trudeau's statement on the Nijjar killing. It is necessary to resume these talks to take the bilateral economic relationship forward. An EPTA can serve as an interim framework for enhancing bilateral economic cooperation and serve as a precursor to the more comprehensive CEPA. Another important area where cooperation is important is education. Education has historically been a cornerstone of India-Canada relations, with India being a significant source of international students for Canadian Universities. Canadian institutions, particularly those in Toronto, British Columbia, and Montreal, are popular choices for Indian students. A Memorandum of Understanding on Higher Education between Canada and India, renewed in 2018, provides a framework for collaboration. However, recent changes in Canadian immigration policies under Justin Trudeau, including visa reductions, and diplomatic tensions, have negatively impacted the flow of Indian students. The downturn in bilateral relations also created anxiety about post-study work opportunities and future immigration prospects. STORY CONTINUES BELOW THIS AD The India-Canada diplomatic row during Trudeau's term led to serious repercussions for Indian students. According to official Canadian data, over 319,000 Indian students were enrolled in Canada as of 2023. However, due to political tensions and subsequent visa tightening, this number witnessed a dramatic 31% drop in study permits issued in early 2025 compared to the same period in the previous year. Indian students reported delays in visa processing times, added scrutiny, and increased financial documentation requirements. Therefore, the thawing of the diplomatic relationship would lead to the easing of the pressure which has gradually been mounting on the Indian students. Visa timelines could normalise and post-graduation work permit eligibility criteria will become more stable. What does the future roadmap look like? The India-Canada relationship is currently in a state of flux, marked by both potential for growth and ongoing challenges. While there are significant opportunities for bilateral cooperation, recent diplomatic tensions have created a need for renewed trust-building and institutionalized engagement. The two countries have a strong foundation for economic ties, with potential for increased trade and investment, especially in areas like renewable energy, clean technology, and infrastructure. Negotiations can be speeded up for a Comprehensive Economic Partnership Agreement (CEPA) and a Foreign Investment Promotion and Protection Agreement (FIPA) to streamline trade and investment flows. Collaboration in sectors like agriculture, chemicals, automobiles, and IT can further strengthen commercial ties. Canada's expertise in clean technology and infrastructure can be valuable to India's development goals, while India's growing economy presents opportunities for Canadian investment. However, it is important to first address the challenges. Recent diplomatic tensions require a renewed focus on rebuilding trust and addressing concerns related to security and intelligence. From India's point of view, addressing the security concerns related to Sikh separatism is of vital importance and has to be the starting point. In this context, increased collaboration between law enforcement agencies is essential. Canada has acknowledged India's concerns and expressed a willingness to engage further. There's a general understanding that a more constructive relationship is beneficial for both nations, and this could augur well for the future. The writer is a retired Indian diplomat and had previously served as Consul General in New York. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost's views.
India Gazette
an hour ago
- India Gazette
Piyush Goyal highlights trade opportunities, sustainable growth during Sweden visit
Stockholm [Sweden], June 12 (ANI): Union Commerce and Industry Minister Piyush Goyal is currently on a three-day official visit to Sweden, where he is engaging with key Swedish and Indian businesses to strengthen trade and investment ties. On the first day of his visit, Goyal participated in a series of high-level business events to boost the trade relations between India and Sweden. He also addressed the Confederation of Swedish Enterprises and took part in the India-Sweden High-Level Trade and Investment Policy Forum. During the session, Goyal spoke about the vast potential for collaboration between India and Sweden, highlighting how both countries can benefit through a shared vision and cooperative efforts. In a social media post, the Minister said, 'Delighted to address the dynamic Confederation of Swedish Enterprises and engage with leading Swedish and Indian businesses at the India-Sweden High-Level Trade and Investment Policy Forum. Discussed the immense potential for collaboration between the two sides'. A major highlight of the event was the release of a joint paper on the proposed India-EU Free Trade Agreement (FTA). Goyal mentioned that the release of this paper demonstrates the joint commitment to building stronger economic ties and working towards inclusive and sustainable growth. He said, 'The joint paper on the proposed India-EU FTA released at the event, underscores our collective commitment to forging stronger economic ties and a future of inclusive growth'. The Minister also held a meeting with Marie Sandin, Managing Director of Tetra Pak Sweden. They discussed ways to boost collaboration in the field of sustainable packaging. Further, both sides explored expanding research and development (R&D) activities in India and enhancing capabilities in the manufacturing of advanced equipment. In the evening, Goyal attended a dinner reception hosted by the Sweden-India Business Council and the Embassy of India. He interacted with several Swedish business leaders and highlighted India's growing investment opportunities. He pointed out that India is on a path of impressive sustainable growth and is committed to its 'Zero Defect, Zero Effect' policy. He encouraged Swedish companies to explore India's potential, especially in areas like technology, innovation, and R&D. Goyal praised India's skilled workforce and said it is the backbone of the country's progress in these sectors. He expressed hope that the discussions and engagements during this visit would soon translate into concrete opportunities and long-term partnerships. (ANI)
