TLDR:
Legacy companies dominated PE-VC investments in 2023, with 75% of funds going to traditional sectors like healthcare and retail. Despite a slowdown in VC funding, India’s share of PE-VC investments in Asia-Pacific has been growing steadily. Favorable policies and global economic shifts have driven investments to India, and analysts predict a better year in 2024. Domestic funds are on the rise, with PE investments increasing over the past four years.
Article Summary:
Traditional legacy companies outperformed new age startups in attracting private equity and venture capital investments in 2023. The majority of funds – 75% – flowed into sectors like healthcare, retail, and energy, with a record high of $5.5 billion going into healthcare alone. Despite a decrease in total PE-VC investments compared to the previous year, India’s share in the Asia-Pacific market has been growing, while China’s share has declined. This shift has been attributed to favorable policies in India, such as production-linked incentives and export promotion initiatives.
Analysts have highlighted risks to investor appetite, such as global GDP growth and geopolitical tensions, but remain optimistic about the investment climate in India for 2024. Domestic funds in India have been steadily increasing their share of PE investments, with a significant expansion of India-based teams by PE funds over the past few years. Global funds like KKR and Blackstone are also looking to increase their capital allocation to India and venture into new asset classes.
