India’s private equity and venture capital (PE-VC) investments surpassed $60 billion in 2022 for the third consecutive year amid global headwinds.
India’s share of PE-VC investments in Asia-Pacific grew from 15 percent in 2021 to 20 percent in 2022, as China tailwinds and India’s macro robustness made it a bright spot for investing, amidst decelerating capital flow in the region, according to Bain & Company’s India Private Equity Report 2023 in collaboration with Indian Venture and Alternate Capital Association (IVCA).
There were more than 2,000 deals.
Traditional sectors led by the BFSI, healthcare, energy and manufacturing demonstrated resilience and grew by 50 percent to $28 billion, enabled by strong domestic consumer sentiment.
Environmental, social and governance (ESG) emerged as a breakout theme in 2022, with investments in clean energy and EV accelerating to reach nearly $7.9 billion.
“Fundamentals of the Indian economy make it an attractive destination for private equity, evident from the fact that India crossed $60 billion in investments for a third time in a row,” said Arpan Sheth, Bain & Company Partner and co-author of the report.
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.
India’s BFSI and fintech sectors have seen a resurgence in interest, with deals worth almost $10 billion in 2022, accounting for 18 percent of the country’s PE-VC investments.
India’s healthcare sector has emerged as an attractive bet for investors. With deals worth $4.3 billion in 2022, at approximately 8 percent of total PE-VC investments, the sector dominated exits, commanding 16 percent of total exit value.
Investments in ESG assets more than doubled, from around 5 percent over the last few years to 13 percent of India’s overall PE-VC investments to 2022, witnessing nearly $7.9 billion in deal value.
