Sectoral shifts and emerging investment trends
In 2024, investment activity across various sectors in India’s PE/VC ecosystem showed both growth and contraction. Sectors such as e-commerce, technology, financial services, media and entertainment, and food and agriculture experienced significant growth, while sectors like life sciences, industrial products, and retail consumer products saw reduced investor interest. Notably, infrastructure, real estate, and financial services led the pack, with infrastructure remaining dominant, and real estate seeing a slight decline from last year.
Exit dynamics in 2024: A mixed picture
In 2024, exit value reached US$26.7 billion, a 7% increase from 2023, despite a slight 7% decline in the number of exit deals. While some investors took advantage of buoyant capital markets to secure returns through IPOs and open market exits, it remained a challenging year on account of slowing growth and increase in uncertainty.
Looking ahead: A positive outlook for 2025
The outlook for PE/VC investments in India remains positive as we move into 2025. Despite a 9% decline in January 2025 compared to January 2024, the uptick in investment activity from December 2024 signals optimism for the year ahead. The favorable macroeconomic environment, stable government policies, and a correction in the public markets is expected to improve PE/VC deal volume and value as seller expectations get more aligned with investor valuations.
The recent and continued correction of listed mid-cap and small-cap indices could provide a more balanced investment climate, presenting significant opportunities for both domestic and international investors in India’s PE/VC ecosystem.
