India’s private equity and venture capital (PE-VC) landscape experienced a significant resurgence in 2024, bouncing back from two years of subdued activity. With $43 billion in investments across nearly 1,600 transactions, this marked a nearly 9% increase compared to the previous year. The recent India Private Equity Report 2025, published by Bain & Company in collaboration with the Indian Venture and Alternate Capital Association (IVCA), attributes this recovery largely to a surge in venture capital and growth investments, while private equity deal volume remained consistent.
Strengthening India’s Position in PE-VC
This revitalization underscores India’s status as the second-largest PE-VC market in the Asia-Pacific region, capturing close to 20% of the total capital inflows across the area. Encouraged by a stable macroeconomic environment, investors are increasingly inclined to fund long-term growth avenues, particularly within traditional sectors such as:
- Real Estate
- Infrastructure
- Financial Services
- Healthcare
Private Equity Deal Dynamics
The overall value of private equity deals held steady at around $29 billion, but investors faced challenges due to high valuations in thriving public markets, complicating negotiations. A notable trend emerged with buyout deals increasing to 51% of total PE value in 2024, a jump from 37% in 2022. Analysts suggest this shift reflects a strategic move among investors to acquire control over high-quality, scalable businesses. The availability of abundant capital, often referred to as "dry powder," has facilitated this trend.
Sector Performance Highlights
Among the various sectors, real estate and infrastructure stood out, contributing 16% to the total PE-VC allocation and witnessing an impressive 70% growth in deal value year-on-year. Financial services closely followed, growing by 25%, largely driven by non-banking financial companies (NBFCs) in the affordable housing sector. Notably, this sub-sector recorded 14 major deals, seven of which surpassed the $100 million mark.
The healthcare sector also thrived, with funding volumes increasing by 80%. Significant investments in medical technology, such as those made in Healthium and Appasamy, highlighted a growing interest in innovation and scalability. Additionally, pharma contract development and manufacturing organizations (CDMOs) and healthcare providers continued to attract significant capital.
IT Sector Boom
The IT and IT-enabled services sector experienced a remarkable year, with deal values soaring by 300%. Major transactions, including Perficient at $3 billion, Altimetrik at $900 million, and GeBBS at $865 million, captured headlines, particularly in the revenue cycle management vertical.
Record Exits Indicate Market Maturity
Exits—often a key indicator of market maturity—hit an all-time high in 2024, with India leading in the Asia-Pacific region, totaling $33 billion in exit values, reflecting a 16% year-on-year increase. The capital markets played a crucial role, allowing investors to capitalize on favorable public sentiment to monetize their mature assets. Public market exits constituted 59% of the total exit value, up from 51% the previous year, driven by robust IPO activity and successful block trades.
Strong IPO Pipeline
The IPO landscape remained vibrant, with 33 offerings in 2024, growing from 23 in 2023. Consumer-focused businesses dominated this space, making up 55% of IPO value, demonstrating a strong investor appetite for sectors driven by consumer demand.
Fundraising Successes Signal Confidence
On the fundraising front, Indian fund managers achieved significant milestones. Kedaara Capital closed its largest fund at $1.7 billion, while ChrysCapital raised a record-breaking $2.1 billion. These achievements reflect a mounting confidence among limited partners regarding the long-term growth potential of India’s economy.
Looking Ahead: A Cautiously Optimistic Future
As the industry looks toward 2025, sentiment remains cautiously optimistic. The favorable outlook is rooted in solid macroeconomic fundamentals. While challenges persist, such as navigating high valuations and competitive deal-making, investors are well-positioned to harness India’s evolving growth narrative.
