Based on research, India's private equity and venture capital (PE-VC) investments will exceed $60 billion in 2022 for the third year in a row, despite global challenges. According to Bain & Company's "India Private Equity Report 2023" in collaboration with Indian Venture and Alternate Capital Association (IVCA), the country's share of PE-VC investments in Asia-Pacific increased from 15% to 20% from 2021 to 2022, as China tailwinds and India's macro robustness made it a bright spot for investing amidst decelerating capital flow in the region.
Environmental, social, and governance (ESG) emerged as a breakout issue in 2022, with clean energy and EV investments rising to approximately $7.9 billion. "Despite the near-term global slowdown, the long-term prospects of the Indian market remain bullish." The robust fundamentals of the Indian economy make it an appealing destination for private equity, as seen by India surpassing $60 billion in investments for the third time in a row," said Arpan Sheth, Bain & Company Partner and report co-author.
"India has also continued to increase its share of PE-VC investments in the Asia-Pacific region, with $1 of every $5 invested in the region being invested in Indian assets," Sheth noted.
"The mix of deals shifted, with mid-sized and small-sized deals gaining share in the overall deal value, while blockbuster deals of more than $1 billion were harder to come by. Buyouts also slowed due to gaps in valuation expectations and tighter credit markets," the report said.
"We expect the short-term softness to continue with growth uncertainties, tight credit markets in the US and tempered public market valuations (and implied private valuations), leading to delays in deal closures with limited deployment pressure on investors," said Sriwatsan Krishnan, Partner and Leader of the Private Equity Practice, Bain & Company.