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Economic Times
07-05-2025
- Business
- Economic Times
India PE-VC market rebounds in 2024 to $43 bn; VC, growth investment spur momentum
After two years of shrinking, India's private equity and venture capital (PE-VC) investments sprung back in 2024, growing about 9 per cent to reach USD 43 billion across nearly 1,600 deals, and outlook for 2025 remains cautiously optimistic, a latest report said on Wednesday. ADVERTISEMENT The 2024 rebound, primarily fuelled by VC and growth investments while PE dealmaking remained steady, were part of insights in Bain & Company's 'India Private Equity Report 2025', released in collaboration with the Indian Venture and Alternate Capital Association (IVCA). "After two years of contraction, India's private equity and venture capital (PE-VC) investments staged a recovery in 2024, growing by approximately 9 per cent to reach USD 43 billion across close to 1,600 deals, with traditional sectors taking the lead in driving market growth," it said. The recovery strengthened India's position as Asia-Pacific's second-largest PE-VC destination, capturing about 20 per cent of the total investment and reflecting growing investor confidence in the country's macroeconomic stability. While India's overall increase was primarily driven by VC and growth investments, PE investments maintained stability at USD 29 billion, as funds navigated high valuations in buoyant public markets, making deal closures more challenging. "We are seeing a clear shift towards buyout deals, with their share of overall PE deal values rising to about 51 per cent in 2024 from about 37 per cent in 2022. This reflects a strategic emphasis on securing control positions in high-quality assets across sectors, enabled in part by record dry powder, and signals that buyouts could remain central to PE activity as funds seek scalable value creation opportunities," Prabhav Kashyap, Partner at Bain & Company, said. ADVERTISEMENT Real estate and infrastructure, and select traditional sectors like IT/ITeS, financial services, healthcare-led funding. Other traditional sectors (such as energy, manufacturing) eased after growing for two years, with a subdued year for deal closures amid high valuations driven by public markets and increased competition. Real estate and infrastructure led the pack at 16 per cent of total PE-VC investment clocking in an approximately 70 per cent surge in deal value over the previous year. Financial services saw a robust growth of about 25 per cent, driven by NBFCs, especially in affordable housing finance, with 14 deals, including seven USD 100 million-plus transactions in 2024, it said. ADVERTISEMENT Healthcare funding remained resilient and showed "impressive momentum" with an 80 per cent rise in deal volumes, supported by large medtech transactions such as Healthium and Appasamy, increased investments in pharma CDMOs, and continued growth in provider deals. The IT and IT-enabled services sector recorded "extraordinary growth" of about 300 per cent, led by major deals including Perficient (USD 3 billion), Altimetrik (USD 900 million), and GeBBS (USD 865 million), with significant activity in revenue cycle management investments. ADVERTISEMENT The year 2024 also marked a watershed year for exits. India exits surpassed all other markets in Asia-Pacific with values reaching an impressive USD 33 billion, representing a 16 per cent year-over-year growth. Investors increasingly looked at buoyant public markets to exit maturing positions. ADVERTISEMENT Public market exits gained prominence, increasing their share from 51 per cent of total exit value in 2023 to 59 per cent in 2024, driven by heightened IPO activity and successful block trades. The market witnessed 33 IPOs compared to 23 in 2023, with consumer-focused sectors dominating close to 55 per cent of total IPO value, demonstrating strong investor appetite for consumer-centric businesses. The domestic fund-raising landscape reached new heights in 2024. Kedaara Capital set a new benchmark by closing its largest-ever fund at about USD 1.7 billion, while ChrysCapital is said to have raised a record USD 2.1 billion. The 2025 outlook remains cautiously optimistic, underpinned by several positive macroeconomic indicators, including strong GDP growth trajectory alongside cooling inflation; robust private consumption growth; impressive rural demand growth; and strategic policy measures, including the first interest rate cut in five years.
Time of India
07-05-2025
- Business
- Time of India
India PE-VC market rebounds in 2024 to $43 bn; VC, growth investment spur momentum
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Live Events After two years of shrinking, India's private equity and venture capital (PE-VC) investments sprung back in 2024, growing about 9 per cent to reach USD 43 billion across nearly 1,600 deals, and outlook for 2025 remains cautiously optimistic, a latest report said on 2024 rebound, primarily fuelled by VC and growth investments while PE dealmaking remained steady, were part of insights in Bain & Company's ' India Private Equity Report 2025', released in collaboration with the Indian Venture and Alternate Capital Association ( IVCA )."After two years of contraction, India's private equity and venture capital (PE-VC) investments staged a recovery in 2024, growing by approximately 9 per cent to reach USD 43 billion across close to 1,600 deals, with traditional sectors taking the lead in driving market growth," it recovery strengthened India's position as Asia-Pacific's second-largest PE-VC destination, capturing about 20 per cent of the total investment and reflecting growing investor confidence in the country's macroeconomic India's overall increase was primarily driven by VC and growth investments, PE investments maintained stability at USD 29 billion, as funds navigated high valuations in buoyant public markets, making deal closures more challenging."We are seeing a clear shift towards buyout deals, with their share of overall PE deal values rising to about 51 per cent in 2024 from about 37 per cent in 2022. This reflects a strategic emphasis on securing control positions in high-quality assets across sectors, enabled in part by record dry powder, and signals that buyouts could remain central to PE activity as funds seek scalable value creation opportunities," Prabhav Kashyap, Partner at Bain & Company, estate and infrastructure, and select traditional sectors like IT/ITeS, financial services, healthcare-led funding. Other traditional sectors (such as energy, manufacturing) eased after growing for two years, with a subdued year for deal closures amid high valuations driven by public markets and increased estate and infrastructure led the pack at 16 per cent of total PE-VC investment clocking in an approximately 70 per cent surge in deal value over the previous year. Financial services saw a robust growth of about 25 per cent, driven by NBFCs, especially in affordable housing finance, with 14 deals, including seven USD 100 million-plus transactions in 2024, it funding remained resilient and showed "impressive momentum" with an 80 per cent rise in deal volumes, supported by large medtech transactions such as Healthium and Appasamy, increased investments in pharma CDMOs, and continued growth in provider IT and IT-enabled services sector recorded "extraordinary growth" of about 300 per cent, led by major deals including Perficient (USD 3 billion), Altimetrik (USD 900 million), and GeBBS (USD 865 million), with significant activity in revenue cycle management year 2024 also marked a watershed year for exits surpassed all other markets in Asia-Pacific with values reaching an impressive USD 33 billion, representing a 16 per cent year-over-year growth. Investors increasingly looked at buoyant public markets to exit maturing market exits gained prominence, increasing their share from 51 per cent of total exit value in 2023 to 59 per cent in 2024, driven by heightened IPO activity and successful block market witnessed 33 IPOs compared to 23 in 2023, with consumer-focused sectors dominating close to 55 per cent of total IPO value, demonstrating strong investor appetite for consumer-centric domestic fund-raising landscape reached new heights in 2024. Kedaara Capital set a new benchmark by closing its largest-ever fund at about USD 1.7 billion, while ChrysCapital is said to have raised a record USD 2.1 2025 outlook remains cautiously optimistic, underpinned by several positive macroeconomic indicators, including strong GDP growth trajectory alongside cooling inflation; robust private consumption growth; impressive rural demand growth; and strategic policy measures, including the first interest rate cut in five years.
Business Standard
07-05-2025
- Business
- Business Standard
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.
