Indian Private Investments Maintain Momentum Amidst Global Economic Challenges – Praxis Global Alliance ‘Private Investment’ Report

India continues its long-term growth journey: ~US$ 57B invested across 1,301 deals in 2023 – India Private Investments Report 2024

• Private Credit Investments reached an all-time high: ~US$ 11B deployed in 2023
• Overall exit activity reached an all-time high in 2023: ~US$ 26B in 2023
• India witnessed considerable fundraising of US$ 16.5B in 2023
• On the path to net zero: Green deals worth ~US$8B in 2023
• Real GDP estimated to grow by 6.3% in FY24

New Delhi, April ’24: Praxis Global Alliance, a global consulting firm, unveiled its latest publication ‘India Private Investments Report 2024’ indicating India’s resilient trajectory amidst global economic headwinds. The report underscores India’s ascent as a prominent player in the global economy, projected to secure the position of the third-largest economy by the decade’s end. Investors pumped in US$ ~57B worth of investments in the previous calendar year across ~1,301 deals, according to the report.

Key sectors such as energy and renewables, engineering and construction, real estate, healthcare and life sciences, and BFSI witnessed substantial investment inflows, recording ~59% of the total Private Credit deal value in India in 2023. The report attributes this investment climate to India’s dynamic regulatory framework, robust domestic capital market, and a significant retail investor base, which fueled an unprecedented surge in IPO deal volumes during 2023.

Garnering rich insights from around ~50 Private Credit investors, the report offers a comprehensive analysis of the ecosystem’s evolution, highlighting shifts in deal-making strategies, fundraising, and exit trends, along with a forward-looking outlook for 2024.

The top takeaways from the insightful report include:

• India’s resilience amid global economic slowdowns, with a noteworthy US$ 57B invested across 1,301 deals in 2023
• A 29% increase in the average deal size, driven by a surge in large deals (21 deals exceeding US$ 500M, compared to 11 in 2022)
• Continued strength in sectors such as healthcare, consumer and retail, manufacturing benefiting from the China+1 strategy, and robust performance in export-oriented IT/SaaS segments
• Growing investments in ESG and climate initiatives, with green deals witnessing a substantial increase to ~US$ 8B in 2023
• A notable increase in buyout deals, constituting US$ 12B in 2023, driven by conglomerates restructuring, platform creation, and operational enhancements
• A significant shift among Limited Partners (LPs) and Sovereign Wealth Funds (SWFs) towards direct investments in India, with investments rising from US$ 2.3B in 2022 to US$ 6B in 2023
• An uptick in fundraising activities, indicating high investor appetite despite record-high dry powder in 2022

Madhur Singhal, Managing Partner – Private Capital, Praxis Global Alliance, emphasized, “India’s private investment landscape continues its long-term growth journey, defying global economic headwinds This robust performance underscores India’s emergence as a key player on the world stage, poised to become the third-largest economy by the end of the decade. The booming sector has demonstrated adaptability and innovation, attracting 196 new PE/VC investors in 2023.”

Investors remain bullish on the India growth story with LP allocations to Private Credit in India expected to increase in 2024 and beyond. Abundant dry powder, a thriving startup ecosystem, and rising exits will boost private investments in India. Reflecting on the past year while projecting into 2024, the report provides invaluable insights into the resilience and growth displayed by India’s private investment ecosystem. We are excited to see how the Indian economy ecosystem is evolving,” he further noted.

This report is intended to provide industry stakeholders (PE/VC & Private Credit funds, business leaders, entrepreneurs, and policymakers) an overall perspective on Indian private market investments in 2023. In this report, we have touched upon the evolution of the Indian macroeconomic outlook and the role played by the private investment ecosystem in enabling India’s growth story. We have conducted an in-depth analysis of the various trends in Indian private investment deal-making including sectoral, deal size, and stage distribution.

To dive deeper into India’s Private Investment landscape, read the full report here: https://www.praxisga.com/reports-and-publications/financial-investors-group/India%20Private%20Investments%20Report%202024