In the face of geopolitical uncertainty and weak credit markets, private equity and venture capital investments in India fell by 63% in 2023 compared to the previous year, totaling $9 billion. According to statistics analyzed by LSEG Deals Intelligence, this is the lowest annual period by value for PE/VC investments in India since 2016.
Private equity investments totaled $1.9 billion in the fourth quarter of 2023, a 43.5% decrease from $3.35 billion the previous year and a 6.2% increase from Q3 2023. The total number of transactions in Q4 2023 fell by 27.9% to 274 from 380 in Q4 2022. This takes private equity investments in 2023 to $8.97 billion, a 63% decrease from the previous year.
Due to the adverse macroeconomic situation, total PE fundraising activity in India is expected to reach $6.6 billion in 2023, a 50% decrease from the previous year.
In terms of industry-specific investments, Internet and Computer Software saw the most investment in 2023, accounting for 60% of the market share. The amount of equity invested in the Internet Specific industry has declined by 59%, with the number of transactions falling to 378 from 562 in 2022. Computer software (-72.6% year on year) and transport (-46.5% year on year) have seen a decrease in investment since 2022. However, the volume of equity invested increased in industries catering to Industrial (13.2%) and Semiconductor/Electr (70.3%). Here are the top ten private equity transactions in 2023.
"Given the record amount raised by India-based private equity funds in 2022 (US$13 billion), significant capital remains available for deployment. While persistent headwinds may impede growth, increased investor interest in India's growing sectors, such as technology, healthcare, and renewable energy, as well as the China-to-India narrative and expectations for lower interest rates in 2024, are potential drivers likely to boost activity in the coming year," said Elaine Tan, Senior Manager, LSEG Deals Intelligence.
