India’s private equity and venture capital (PE-VC) investments staged a recovery in 2024, growing by approximately 9 per cent to reach $43 billion across close to 1,600 deals, with traditional sectors taking the lead in driving market growth, a report showed on Wednesday.
The recovery strengthened India’s position as Asia-Pacific’s second-largest PE-VC destination, capturing approximately 20 per cent of total investment and reflecting growing investor confidence in the country’s macroeconomic stability, according to the report by Bain & Company.
While India’s overall increase was primarily driven by VC and growth investments, PE investments maintained stability at $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 51 per cent in 2024 from 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.” said Prabhav Kashyap, Partner at Bain and Company.
Real estate and infrastructure, and select traditional sectors like IT/ITeS, financial services, healthcare-led funding while other traditional sectors (such as energy, manufacturing) eased after growing for two years, with a subdued year for deal closures amidst 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 approximately 25 per cent, driven by NBFCs, especially in affordable housing finance, with 14 deals including seven $100 million transactions in 2024.
2024 marked a watershed year for exits; India exits surpassed all other markets in Asia-Pacific with values reaching an impressive $33 billion, representing a 16 per cent year-over-year growth, as investors increasingly looked to buoyant public markets to exit maturing positions, said the report.
