TLDR:
- PE-VC funding in India expected to be subdued in 2024 compared to previous years due to various factors such as elevated interest rates, geopolitical uncertainties, and sluggish GDP growth.
- Despite the subdued deal activity, the long-term outlook for India remains strong, driven by robust macroeconomic fundamentals and supportive government policies.
According to a report by Bain & Company in collaboration with IVCA, PE-VC dealmaking in India is predicted to remain tempered in 2024, compared to the scenario in 2021-2022. This is attributed to global macroeconomic stabilization. The report highlighted the following key points:
- Capital deployment in India will remain cautious due to factors such as global macro conditions rebounding from sluggish GDP growth, elevated interest rates until H1 2024, and continued geopolitical conflicts.
- India is expected to be the fastest-growing major economy in 2024, benefiting from robust macroeconomic fundamentals. These include stable economic landscape, fiscal and monetary policy discipline, and supportive government policies.
The report also pointed out that the China+1 strategy is likely to benefit Indian manufacturers in sectors such as electronics, pharma, and chemicals. Additionally, in 2024, Generative AI is expected to be a focus for funds in India across various sectors. Despite a decline in dealmaking activity, 2023 saw a significant increase in exit value and volume in the Indian PE-VC markets. Public market sales surged and exits stood out prominently.
