- Growth investments were the highest deal type in May 2024, accounting 36% of the total PE/VC investments in May 2024
- Secondary exits were the highest at US$1 billion across five deals followed by open market exits
- Real estate emerged as the top sector in May 2024, reporting US$2.5 billion of PE/VC investments across 12 deals
Mumbai, 01 July 2024: According to the IVCA-EY monthly PE/VC roundup, PE/VC investments in May 2024 were 48% higher than April 2024 in value terms.
Vivek Soni, Partner and National Leader, Private Equity Services, EY said, “May 2024 recorded US$6.9 billion in PE/VC investments, 48% higher than April 2024 and 54 % than May 2023. The number of deals in May 2024 was higher by 46% y-o-y.
In May 2024, pure play PE/VC investments reached US$4.4 billion, 47% higher compared to May 2023 (US$3 billion) and 16% higher than April 2024 (US$3.8 billion). The number of deals was higher by 45% y-o-y (100 deals in May 2024 vs. 69 deals in May 2023). Investments in real estate and infrastructure asset class in May 2024 (US$2.5 billion) were higher by 67% y-o-y (US$1.5 billion in May 2023) and 183% compared to April 2024 (US$894 million).
Growth investments were the highest deal type in May 2024 at US$2.5 billion, accounting for 36% of the total PE/VC investments in May 2024. This was followed by buyout investments at US$2.3 billion. From a sector point of view, real estate was the top sector in May 2024, recording US$2.5 billion, followed by financial services (US$1.6 billion).
PE/VC exits were at US$2.5 billion across 23 deals in May 2024, a 21% growth y-o-y. (US$2.1 billion in May 2023). Secondary exits were the highest in May 2024 (US$1 billion across five deals).
As highlighted in past editions of this report, Infrastructure sector continues to be favored by PE and has attracted the highest investments in the last five years (2019–May2024). It has been the most favored sector by PE/VC and SWF investors, accounting for 17% of the total PE/VC investments made during the last five years (2019 to May 2024). Renewables segment attracted the highest value of PE/VC investments, followed by roads and highways. Please see our spotlight section for more details.
In 2024, large deals (deals >US$100 million) accounted for over two-thirds of the total PE/VC investments by value (US$19 billion from large deals out of total PE/VC investment of US$25.1 billion). This significant proportion underlines investor preference for more substantial investments, the pull back in the start-up segment and the continued dominance of International GP’s in the Indian PE/VC market. India’s position as an attractive destination for PE/VC investments is expected to remain strong in the foreseeable future. Going forward, we believe International GP’s will continue to dominate the Indian PE/VC market as deals become larger and new International GP’s enter the Indian market. With the NDA 3.0 govt sworn in, the next event to watch out for is the new budget expected in July 2024. We remain cautiously optimistic as the Indian macro continues to improve.”
Investments
PE/VC investments in May 2024 (US$6.9 billion) were higher by 48% than April 2024 (US$4.7 billion) and 54% than May 2023 (US$4.5 billion). In terms of number of deals, May 2024 recorded 115 deals, an 11% growth compared to April 2024’s 104 deals.
In May 2024, there were 16 large deals (deals of value greater than US$100 million) worth US$5.6 billion, marking a 61% increase compared to May 2023 (US$3.5 billion across 12 deals). The largest deal in May 2024 was ADIA and KKR’s US$1.5 billion investment in Reliance Logistics and Warehouse Holdings.
Growth investments had the largest share in May 2024 with US$2.5 billion invested across 17 deals, compared to US$2 billion invested in May 2023 (across 18 deals), a 30% growth in value on a y-o-y basis. Buyout investments were the second largest, with US$2.3 billion invested across nine deals in May 2024, a 99% growth compared to US$1.1 billion across five deals in May 2023. Start-up investments were the third highest in May 2024 (US$906 million across 64 deals) with a 51% growth compared to May 2023 (US$599 million across 43 deals). In terms of number of deals, May 2024 recorded a growth of 49% y-o-y. Credit investments saw a growth of 17% (by value) in May 2024, with US$875 million invested across 13 deals, compared to US$749 million invested across nine deals in May 2023. Lastly, PIPE investments stood at US$336 million across 12 deals compared to US$63 million across four deals in May 2023, recording a growth of 434%.
From a sector point of view, real estate was the top sector in May 2024 in value terms with US$2.5 billion in PE/VC investments across 12 deals, followed by financial services (US$1.6 billion), healthcare (US$1.2 billion), and e-commerce (US$380 million). These sectors accounted for 83% of the total PE/VC investments in May 2024.
Spotlight: PE/VC investment trends in the infrastructure sector
Taking a decadal view, the infrastructure sector was the second largest sector for PE/VC investments, with US$64.9 billion invested across 414 deals behind financial services). However, over the past five years (since 2019), these sectors swapped positions and infrastructure is the leading sector (US$51.5 billion across 295 deals) followed by financial services.
Infrastructure sector has played a crucial role in balancing the volatility seen in pure-play PE/VC investments over the years. The sector saw a significant increase in large deals, with 18 transactions greater than US$100 million in 2022, 32 transactions in 2023 and 11 transactions in 2024 so far.
In YTD 2024, infrastructure sector investments have exceeded US$6.6 billion, accounting for 26% of overall PE/VC investments, and we expect this trend to continue in the second half of the year, as the infrastructure deal pipeline remains strong.
In the past five years, renewables and roads sector were the top two sub-sectors both in terms of value and volume, each receiving more than US$13 billion in investments. Buyouts have been the most preferred strategy, accounting for 41% of the overall investment in the sector, followed by growth investments, which accounted for 24%.
Exits in the infrastructure sector in the past five years however have been sparse, dominated by a couple of large exits to strategics.
The upswing of PE/VC investments in the infrastructure sector is also attributable to a growing pipeline of government-backed assets, especially in the roads segment. Core infrastructure sectors, including roads, transmission, renewables, ports, and airports, are experiencing substantial deal flow and continue to attract investor interest.
The Government of India’s ambitious plan to establish 500GW of renewable capacity by 2030, PM Gati Shakti plan and increased focus on decarbonization are key drivers, encouraging more investments in the sector in the coming years.
Exits
In May 2024, there were 23 exits totalling US$2.5 billion, compared to US$2.1 billion across 24 deals in May 2023. Secondary exits were the highest in May 2024 at US$1 billion across five deals, followed by open market exits.
The largest exit in May 2024 was Apax Partners selling 100% stake in Healthium Medtech Limited for US$838 million to KKR.
Fundraise
May 2024 recorded a total fundraise of US$608 million, compared to US$2.3 billion raised in May 2023.
US$204 million raised by TVS Capital was the largest fundraise in May 2024.
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