Despite the global economic slowdowns, India’s private investment landscape (which includes private equity, venture capital and private credit, etc), maintained strong momentum in 2023. The calendar year saw investments worth $57 billion across 1,301 deals in the country, up from $54 billion in 2022, according to a report by Praxis Global Alliance.

Key sectors such as energy & renewables, engineering & construction, real estate, and healthcare & life sciences were the top funded sectors, contributing about 50 per cent of the total value in 2023.

Growth stage investments (26 per cent), late and buyout deals (36 per cent), and private credit deals (19 per cent) dominated total investments. Buyout investments reached $12 billion, primarily driven by large deals in the healthcare & life sciences sector. Share of PE/VC buyouts is increasing in India driven by conglomerates hiving off new businesses, platform creation, and operational improvement, it said.

Large deals up

India attracted 196 new PE/VC investors in 2023, including 121 international and 75 domestic investors. Large deals ($500 million plus) almost doubled to 21 in 2023 from 11 in 2022. Green investing deals saw a substantial increase to $8.1 billion in 2023 from $5.2 billion in 2022, on the back of growing investments in ESG and climate initiatives.

Private credit investments and overall exit activity reached all-time highs of about $11 billion and $26 billion, respectively, in 2023.

Madhur Singhal, Managing Partner-Private Capital at Praxis Global Alliance, stated, “This robust performance in 2023 underscores India’s emergence as a key player on the world stage, poised to become the third-largest economy by the end of the decade.”

Singhal noted that investors remain bullish on the India growth story as abundant dry powder (unspent cash reserves waiting to be invested), a thriving start-up ecosystem, and rising exits will boost private investments in India.

India-focused funds

India-focused private investment funds currently hold a record-high dry powder of about $20 billion, with increasing pressure to deploy investments.

The domestic consumption-led sectors such as healthcare and consumer/retail are expected to sustain momentum, manufacturing will benefit from China+1 tailwinds, and export-oriented IT and software as a service (SaaS) will stay resilient, it said.