TLDR:
- Indian private equity and venture capital deal activity reduced by 35% in 2023
- Global factors, like weakened investor sentiment, drove this slowdown
India’s private equity and venture capital landscape experienced a decline in deal activity in 2023, with investments dropping by 35% from the previous year. This slowdown was primarily attributed to global factors such as weakened investor sentiment and macroeconomic challenges like high interest rates and geopolitical tensions. The decline was more pronounced in venture capital investments, which saw a reduction of 60% due to their exposure to high-growth businesses with less established economic models. On the other hand, private equity investments remained more resilient, declining by a moderate 20%, with large-scale dealmaking for high-quality assets persisting. Traditional sectors like healthcare and advanced manufacturing saw relatively higher activity in the investment landscape, indicating a shift towards mature operating economics and secular growth characteristics. Despite the overall decline in dealmaking, 2023 witnessed a marquee year for Indian exits, with exit value soaring to $29 billion, driven by public market sales and deepening Indian public markets. As India plays an increasingly significant role in the Asia-Pacific PE-VC activity, the report suggests that traditional sectors like healthcare and advanced manufacturing are expected to continue attracting significant investments in the future.
