Private equity investments hit 7-year low at $8.97 billion in 2023: LSEG Deals Intelligence

Private equity and venture capital investments in India declined 63 percent in 2023 to touch $8.97 billion compared with $24.19 billion in the previous year, data available with LSEG Deals Intelligence showed.

The PE/VC investments in 2023 was weighed down by geopolitical uncertainties and tight private markets. The number of deals in 2023 too saw a decline at 1229, down 24.4 per cent over 1,625 deals in 2022.

This marks the lowest period by value for PE/VC investments in India since 2016, when value of investments stood at $5.2 billion, Elaine Tan, Senior Manager, LSEG Deals Intelligence said.

Tan also highlighted that the challenging macroeconomic environment resulted in a 50 per cent decline in the total PE fundraising activity in India to $ 6.6 billion in 2023.

PE/VC deal activity was impacted in October-December 2023 with Private Equity investments coming in at $ 1.9 billion, down 43.5 per cent from $3.5 billion in the same quarter in previous year.

In the December 2023 quarter, PE investments amounted to $1.9 billion, reflecting a 43.5 per cent decline from $3.35 billion in Q4 2022 and a 6.2% improvement from Q3 2023. Total number of deals in Q4 2023 declined 27.9 per cent to 274 compared with 380 in Q4 2022, LSEG Deal Intelligence data showed.

Tan highlighted that substantial capital remains poised for deployment given the record amount raised by India-based PE funds in 2022 ($13 billion).

“While persistent headwinds may impede growth, the increased investor interest in India’s growing sectors, such as technology, healthcare, and renewable energy, along with the China-to-India narrative, and the expectations for lower interest rates in 2024, stand as potential drivers likely to bolster activity in the forthcoming year,” Tan said.

Internet Specific and Computer Software companies continue to attract maximum PE interest with $ 3.6 billion and $ 1.8 billion invested in the year 2023.

In terms of industry-specific investments, Internet Specific and Computer Software have seen the maximum investments coming in 2023 and captured 60 per cent of the market share. 

Sum of equity invested in the Internet Specific sector has decreased by 59.2per cent, with the number of deals falling to 378 from 562 from year 2022. 

Computer Software (-72.6 per cent y-o-y), Transportation (-46.5 per cent y-o-y), have witnessed a decline in the sum invested as compared to 2022. However, industries catering to Industrial (13.2 per cent), and Semiconductor/ electronics (70.3 per cent) saw an increase in the sum of equity invested, LSEL Deals Intelligence said.

The top ten private equity deals in India in 2023 are Lenskart Solutions ($620 million sum of equity invested); Ola Electric Mobility Pvt Ltd ($300 million); Serentica Renewables ($250 million); Kiranakart Technologies ($231 million); Perfios Software ($229 million); Zetwerk Manufacturing Businesses ($218 million) ; Girnar Insurance ($209.6 million); Vistaar Financial Services ($158.3 million); Sona Blw Precision ($149.6 million) and Veritas Finance ($145.6 million).

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