India’s PE-VC investments hit US$39 billion in 2023: Bain & Co

The manufacturing sector in India attracted roughly US$ 2 billion in investments

May 29, 2024

The allocation of investments saw a significant change in 2023, with conventional industries, including manufacturing, healthcare, and energy, contributing about 75% of the total

More than 70% of the deal value in the previous year came from major original equipment manufacturers (OEMs)

The PE-VC dealmaking landscape in India is anticipated to continue temperate despite a tame global prognosis for 2024

Strong deal activity is also anticipated in the EV market, especially from OEMs preparing capacity expansions or new product launches

Private equity and venture capital (PE-VC) investments in India totalled approximately US$39 billion in 2023, matching the investment levels observed before the pandemic. The allocation of investments saw a significant change in 2023, with conventional industries, including manufacturing, healthcare, and energy, contributing about 75% of the total, an increase from nearly 60% in 2022, according to a report by Bain and Co., published in conjunction with the Indian Venture and Alternate Capital Association.

The report highlighted that the manufacturing sector in India attracted roughly US$ 2 billion in investments and expanded at a compound annual growth rate (CAGR) of approximately 20% during the previous two years. 

Considerable investments were made in the electric vehicle (EV) sector, which is predicted to have a 40% penetration rate by 2030. More than 70% of the deal value in the previous year came from major OEMs, including notable deals in businesses like TI Clean Mobility, Ola Electric, Ather Energy, and Mahindra EV.

The PE-VC dealmaking landscape in India is anticipated to continue temperate despite a tame global prognosis for 2024. Traditional sectors, especially sophisticated manufacturing, will likely draw large investments due to strong fundamentals and supporting government regulations. Strong deal activity is also anticipated in the EV market, especially from OEMs preparing capacity expansions or new product launches and from players in the charging infrastructure, such as battery-swapping companies aiming to broaden their geographic reach or enter new EV markets. 

Source: The Hindu

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