Private equity investments in India hit a seven-quarter high in April-June 2024 at $3.64 billion, up 75 per cent sequentially over $2.08 billion recorded in Jan-Mar 2024, latest data from LSEG Deals Intelligence showed.
The latest quarterly reading was 31 per cent higher than the $2.8 billion worth of PE investments made in the same quarter last year.
However, for the first half this calendar year, PE investments was down 3.6 per cent at $5.72 billion ($ 5.93 billion), according to LSEG Deals Intelligence.
The number of deals for the quarter under review increased 2.7 per cent sequentially to 299 from 291 in the Jan-March quarter this year. However, the number of deals declined 15.3 percent on a year-on-year basis, from 353, as recorded in April-June 2023.
Elaine Tan, Senior Manager at LSEG Deals Intelligence, said that private equity investments in India markedly improved in the second quarter of 2024. The total amount of equity invested amounted to $3.6 billion, a 75 per cent sequential increase from the first quarter of 2024.
This pushed the total amount of equity invested during the first half of 2024 to $5.7 billion, down 3.6 per cent from a year ago.
“Still, India remains a critical market for deploying private equity capital, accounting for at least 22 per cent of Asia Pacific’s sum of equity invested during the first half of 2024 compared to 19 percent market share from the first half of last year”, Tan said.
Private equity and venture capital firms continue to focus on India given its strong economic growth, thriving domestic equity capital markets, and dynamic start-up ecosystem.
Tan said that the expanding consumer market further provides ample growth opportunities across various sectors, including technology, healthcare, renewable energy, and infrastructure.
SECTOR-SPECIFIC PE FLOWS
Internet-specific, Financial Services and computer software companies attracted maximum PE interest, with $2,143 million, $931 million, and $901 million invested in April-June 2024.
These sectors accounted for nearly 50 per cent market share of the total PE investments into India in Jan-June 2024.
The sum of equity invested in the Internet-specific sector decreased marginally in H1 this year in value terms, but the number of deals fell sharply to 170 from 214 in the same period last year.
For the quarter under review, the sum invested in computer software and transportation declined by 43 per cent and 45 per cent, respectively.
However, the latest data showed that both industries catering to consumer-related (222.1 per cent) and Business Services (743.8 per cent) saw an increase in the sum of equity invested.
FUNDRAISING
The fundraising activity for the private equity funds located in India saw a 49 per cent decline in January-June 2024 at $2.71 billion ($5.32 billion).
NUMBER OF FIRMS
The total number of PE firms that invested in India from January to June 2024 declined 1.9 percent to 567, compared to 578 in the same period last year. The number of firms that invested in India from January to March 2024 stood at 367.