October 2024 recorded PE/VC Investments worth US$4.7 billion across 91 deals: EY-IVCA Report

• Credit investments were the leading deal type in October 2024, followed by growth investments
• PE/VC exits in October 2024 were at US$1.1 billion, reflecting a 40% decline y-o-y
• Fundraise activity dips to US$209 Million, a significant drop from 2023

Mumbai, 18 November 2024: According to the IVCA-EY monthly PE/VC roundup, PE/VC investments in October 2024 were 40% higher than September 2024.

Vivek Soni, Partner and National Leader, Private Equity Services, EY said, “October recorded US$4.7 billion in PE/VC investments, 4% higher than investments in October 2023 and 40% higher than in September 2024. The number of deals in October 2024 was 21% higher year-on-year.

Pure-play PE/VC investments in October 2024 (US$2.7 billion) declined by 19% compared to October 2023 (US$3.3 billion) and declined by 6% compared to September 2024 ($2.9 billion). The real estate and infrastructure asset class saw a growth of 67% year-on-year (US$2 billion in October 2024 vs. US$1.2 billion in October 2023). In terms of the number of deals, pure-play and real estate and infrastructure asset classes grew by 18% and 40% year-on-year, respectively.

Credit investments were the highest deal type in October 2024 at US$1.8 billion, followed by growth investments at US$1.6 billion. From a sector point of view, infrastructure was the top sector in October 2024, recording US$1.8 billion, followed by technology (US$1.1 billion).

PE/VC exits were at US$1.1 billion across nine deals in October 2024, 40% lower than in October 2023 (US$1.9 billion). Secondary exits in October 2024 accounted for 96% of all exits by value (US$1.1 billion).

While the startup world is experiencing rapid growth, established and mature companies are experiencing a surge in interest due to their balanced risk-return profiles. These companies promise substantial returns in a shorter period and offer greater predictability compared to investments in early-stage companies. This makes them an attractive target for PE and VC investors looking to generate value from growth investing. Please refer to the spotlight section on Growth capital strategy for more details.

The last quarter of the year witnessed a strong start, with October PE/VC investments growing by 40% compared to September. However, rising inflation, rupee depreciation and the significant dip in 3Q2024 corporate earnings and ensuing earning downgrades are making investors adopt a cautious approach. The Trump 2.0 US administration brings with it its own share of uncertainties which will play out when the new US govt start articulating its policies in January 2025.  Although the Indian equity markets have seen some correction, challenges around bid-ask spreads in private transactions remain. While we remain cautiously optimistic in the medium term, for the next 2-3 months, we project tepid PE/VC investment activity. On the exits front, PE backed IPO’s and open market exits are expected to reduce significantly if volatility in midcap-small cap space continues.”

Investments

PE/VC investments in October 2024 recorded US$4.7 billion, 4% higher than in October 2023 (US$4.5 billion) and 40% higher than in September 2024 (US$3.4 billion). In terms of deal volume, October 2024 saw a 21% increase with 91 deals compared to 75 in October 2023.

October 2024 recorded nine large deals (deals with value greater than US$100 million), aggregating US$3.3 billion, a 4% decline in value from October 2023 (US$3.4 billion across 11 deals) and 69% higher than September 2023 (US$2 billion across eight deals). The largest deal of the month involved Temasek acquiring 18% stake in VFS Global Services from Blackstone for US$950 million.

Credit investments led the way in October 2024, with US$1.8 billion invested across nine deals — a staggering increase from US$169 million across five deals in October 2023, marking nearly tenfold growth in investment. Growth investments were the second largest, with US$1.6 billion invested across 14 deals in October 2024, a growth of 32% compared to US$1.2 billion across 17 deals in October 2023. Start-up investments were the third largest at US$880 million across 56 deals, reflecting 50% decline compared to October 2023 (US$1.8 billion across 42 deals). Buyout investments recorded US$228 million across four deals, an 80% decline from October 2023 (US$1.2 billion across four deals). PIPE investments stood at US$195 million across eight deals, showing a slight 2% increase from October 2023 (US$191 million across seven deals).

From a sector point of view, infrastructure was the top sector in October 2024, attracting US$1.8 billion in PE/VC investments across nine deals, followed by technology (US$1.1 billion) and financial services (US$470 million). These sectors, combined, accounted for 72% of total PE/VC investments in October 2024.

Spotlight: Pure-play growth investments

Pure-play growth investments continue to drive the PE/VC landscape

Over the past decade, pure-play growth opportunities have seen significant investment, attracting a total of US$95.9 billion across 1,181 deals, representing 31% of all investments made since 2014. This trend has accelerated in recent years, particularly since 2019. A total of US$71.4 billion was poured into 743 deals, accounting for 31% of all investments in the sector. Growth investments strategy is closely followed start-up investments, which attracted the highest investments since 2019 (US$78.3 billion) in pure-play class.

Since 2019, large deals have dominated the growth investment landscape, contributing US$58.1 billion across 163 deals and accounting for 81% of total growth strategy investments.

In 2020, pure-play growth investments reached a historic high of US$21.3 billion across 101 deals. This surge was primarily driven by two marque opportunities in which a number of growth investors invested; US$9.9 billion investment in Jio Platforms and a US$6.4 billion investment in Reliance Retail Ventures.

From a sectoral perspective, telecommunications has been the largest recipient of growth capital in this period at US$10.3 billion, followed by retail and consumer products at US$9.3 billion, driven largely by the two major deals in Jio Platforms and Reliance Retail Ventures. E-commerce ranked third with US$9.2 billion of growth investments, highlighted by the landmark US$3.6 billion deal in Flipkart.

Mature and growth-stage companies are typically more stable and established than early-stage startups, with proven business models that reduce investment risk. These companies also offer potential early exit opportunities, through IPOs or acquisitions, etc., enabling PE/VC investors to realize returns in a shorter time frame and often at healthy valuations.

PE/VC investments in India are fueled by a combination of factors, including market expansion opportunities, globalization, a strong investor appetite for high-growth assets, and technological advancements. As India’s economy continues to evolve, growth investments are expected to play an increasingly pivotal role in shaping the PE/VC landscape and driving long-term economic development.

Exits

October 2024 recorded nine exits worth US$1.1 billion, compared to US$1.9 billion in October 2023 across 22 exits.

Secondary exits were the highest in October 2024 at US$1.1 billion across four deals and accounted for 96% of overall exits in October.

The largest exit in October saw Blackstone sell an 18% stake in VFS Global services to Temasek for US$950 million.

Fundraise

In October 2024, total fundraises amounted to US$209 million across 10 funds, a significant decrease compared to US$2.4 billion raised in October 2023 and US$481 million in September 2024.

The largest fundraise of the month was National Space Promotion and Authorisation Centre raising $119 million

Notes to Editors

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About IVCA

The Indian Private Equity & Venture Capital Association (IVCA) is the apex body promoting the Alternative Investment Funds (AIFs) in India and promotes stable, long-term capital flow (Private Equity (PE), Venture Capital (VC) and Angel Capital) in India.

With leading VC/ PE firms, institutional investors, banks, corporate advisers, accountants, lawyers, and other service providers as members, it serves as a powerful platform for all stakeholders to interact with each other. Being the face of the industry, it helps establish high standards of governance, ethics, business conduct and professional competence. With a prime motive to support the ecosystem, it facilitates contact with policy makers, research institutions, universities, trade associations and other relevant organizations. Thus, support entrepreneurial activity, innovation, and job creation.