Private equity investments into India hit a six-year low in January-March 2024 at $1.77 billion, down 43.6 per cent over $3.15 billion a year ago, latest data from LSEG Deals Intelligence showed.  

This latest downturn reflects the weakest start to the year since 2018, when PE investments into India touched $1.7 billion in January-March quarter, Elaine Tan, Senior Manager, LSEG Deals Intelligence, said. 

The latest quarterly reading on PE investments was also 25 per cent lower than the PE investments level of $2.37 billion recorded in October-December 2023. 

The number of deals for the quarter under review declined to 280 from 338 in the January-March quarter last year.

“Despite this sluggish start, the substantial capital accumulated since 2022 remains poised for deployment. While persistent challenges may pose hurdles to growth, India’s strong economic growth, thriving capital markets, easing inflationary pressures, and potential interest rate cuts serve as potential catalysts to reinvigorate activity for the remainder of the year,” Tan said.

Sector-specific PE flows 

Internet specific and financial services companies attracted maximum PE interest with $560 million and $291 million, respectively, invested in January-March 2024. Both these sectors accounted for 48 per cent market share of the total PE investments into India in January-March 2024.

Sum of equity invested in the internet-specific sector decreased by 57.2 per cent with the number of deals falling to 87 from 117 in January-March 2023.  

For the quarter under review, both computer software and transportation saw a decline in sum invested at 70.5 per cent and 53.4 per cent respectively.  However, 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, latest data showed.

Fund raising

Interestingly, the fundraising activity for the private equity funds located in India saw a whopping 218.5 per cent increase in January-March 2024 to $1.48 billion from $465 million in October-December 2023. It was, however, down 46.3 per cent over $2.76 billion raised in January-March last year.

Number of firms

The total number of PE firms that invested in India in January-March 2024 increased 10.6 per cent to 366 compared to the previous quarter count of 331 in October-December 2023. The number of firms that invested in India in January-March 2023 stood at 373.