In 2024, private equity investments in India saw an impressive surge of 46.2%, reaching Rs. 1,28,865 crore (US$ 15 billion), according to LSEG Deals Intelligence. This marked a significant rebound in investment activity after a more subdued period in previous years. The growth was driven primarily by substantial investments in key sectors like healthcare, consumer industries, and technology, positioning India as a top destination for private equity in the Asia Pacific region.

Key Sectors Driving Investment Growth

The healthcare and pharmaceuticals sectors emerged as the leading drivers of private equity investment in India, reflecting a growing focus on improving healthcare infrastructure and services. Consumer-related industries and technology also witnessed robust growth, with e-commerce and digital transformation continuing to attract substantial investor interest.

One of the standout transactions was the Rs. 18,642 crore (US$ 2.17 billion) deal involving Data Infrastructure Trust, which executed a single transaction spanning across three firms. This deal reflects the increasing demand for data infrastructure in India, driven by the country's rapid digital transformation.

Another notable deal was Kiranakart Technologies Pvt Ltd, which secured Rs. 11,684 crore (US$ 1.36 billion) through four separate investments. This highlights the expanding scope of e-commerce and online retail in India, a sector that has seen tremendous growth in recent years due to rising internet penetration and changing consumer behavior.

Other significant deals included Hyundai Motor India Limited, which invested Rs. 8,496.50 crore (US$ 989 million) in India’s transportation sector, signaling continued interest in electric vehicles (EVs) and sustainable mobility solutions. Additionally, Fourth Partner Energy Pvt Ltd, a key player in the industrial/energy sector, raised Rs. 2,353.93 crore (US$ 274 million) to further expand its renewable energy initiatives.

Private Equity Funds Raised Decline

While the overall investment figures were positive, the private equity funds raised in India showed a decline of 29% year-on-year (YoY), dropping to Rs. 36,941 crore (US$ 4.3 billion). This decline in fund-raising could be attributed to several factors, including global economic uncertainty, tightening monetary policies, and shifting investor preferences. However, despite this dip, India remains an attractive market for private equity due to its large and growing economy, young population, and increasing digitalization.

Over the past three years, approximately Rs. 197,593 crore (US$ 23 billion) in private equity funds have been earmarked for deployment in India. This indicates strong investor confidence in the long-term potential of the Indian market, with funds continuing to flow into the country, albeit at a slightly slower pace.

India’s Market Share in Asia Pacific Private Equity

India has firmly established itself as a leading destination for private equity in the Asia Pacific (APAC) region. The country now holds a 28% market share, up significantly from 15% in 2023. This growth is attributed to favorable government initiatives, which continue to make India an attractive investment destination. Initiatives like the National Monetization Pipeline (NMP) and tax incentives for sectors such as renewable energy and electric vehicles are helping to create a more conducive environment for private equity investments.

Factors Driving Private Equity Growth

Several factors are contributing to the surge in private equity activity in India, including:

1. Government Initiatives: Proactive policy reforms, tax incentives, and infrastructure development programs have bolstered India’s appeal as an investment hub.

2. Global Monetary Easing: With global interest rates remaining relatively low, private equity firms are increasingly looking to India as a high-growth market.

3. Sectoral Opportunities: Rapid growth in key sectors such as technology, healthcare, renewable energy, and e-commerce continues to attract significant investment.

4. ESG Focus: There has been a growing emphasis on integrating Environmental, Social, and Governance (ESG) factors into investment strategies. This has led to an increased focus on sustainable projects, particularly in sectors like renewable energy and electric vehicles.

Private Equity Outlook for 2025

Looking ahead, analysts expect the momentum of private equity investments in India to continue into 2025. India’s young workforce, increasing digitalization, and expanding consumer base present significant growth opportunities for private equity investors. Additionally, government support for sectors like electric vehicles, renewable energy, and technology startups will likely drive further investments.

With an increasingly favorable environment for private equity funds and growing opportunities in emerging sectors, India is poised to remain one of the most attractive investment destinations in the Asia Pacific region.

Conclusion

The surge in private equity investments in India in 2024 reflects the country's growing importance in the global investment landscape. Despite the slight decline in funds raised, India remains a top market for private equity, with healthcare, technology, and e-commerce leading the charge in driving growth. With ongoing policy support, sectoral opportunities, and increasing investor focus on ESG factors, India is well-positioned to sustain its growth in private equity investments in the coming years.

The Upcoming IPOs in this week and coming weeks are Sat Kartar Shopping,Barflex Polyfilms and Laxmi Dental.

The Current active IPO are Standard Glass Lining, Quadrant Future, Capital Infra Trust, Delta Autocorp, Avax Apparels, B R Goyal.