PE investments in India reach $70 bn in 2021: Bain & Company

Private equity (PE) investments in India reached $70 billion in 2021 in more than 2,000 deals – mainly driven by deal activities in consumer tech and IT/ITES sectors, according to the annual India Private Equity Report 2022 by Bain & Company.
VC funding for tech
The consumer tech and IT/ITES sectors combined represented more than 60 percent of the year’s deal value, at nearly $44 billion, the report said.

The number of large size PE funding deals witnessed significant increase and saw 11 investments worth greater than $1 billion with Flipkart, Hexaware and Mphasis being among the largest deals, compared to six in 2020.

“This year, we anticipate a significant tempering of pace in investment activity as macro and micro trends converge, but see this as an opportunity for the consolidation of last year’s gains, which should make India witness annual PE-VC deal values of around $50 billion more frequently,” says Arpan Sheth, Partner, Bain & Company and co-author of the report.

IT/ITES saw investments of $14.2 billion in 2021, growing by $10.3 billion or 255 percent as compared to 2020.

Indian IT is increasingly courting billion-dollar-plus deals, and the deal size and count is expanding with significant deals taking place in the sector in the last few years, said Sriwatsan Krishnan, Partner, Bain & Company and co-author of the report.

IT has accounted for nearly 40 percent of buyout deal value, and nearly 20 percent of buyout deal volumes over the last three years.

Exits worth more than $36 billion were unlocked in 2021, quadrupling fund exits over 2020’s $9 billion.

Strategic sale continued to be the most dominant route of exit, with nearly 50 percent of all exits over the last few years.