India Private Equity Mid-Market Monitor: H1 2023 - 'Investing in India's Growth Story'
Date
July 19, 2023 • 7 min read
India presents significant investment opportunities as its economic growth story reaches a pivotal stage. However, global macroeconomic headwinds have led to a significant drop in Indian mid-market PE/VC activity.
Despite the challenging global economic backdrop, India has emerged as a resilient and rapidly growing major world economy. This growth can be attributed to specific trends that have boosted investor confidence. As a result, we anticipate a resurgence in activity later in 2023.
DC Advisory’s India team discuss these factors driving India’s growth, including:
- India’s growth story
- India's investment landscape
- 2023/2024 outlook; and
- Sectors driving India's growth
A note from the CEO, DC Advisory India
"In the ever-changing landscape of global markets, India has emerged as a beacon of growth and resilience. With its public markets at an all-time high, outperforming global peers and the country maintaining its position as the fastest-growing major world economy, India has become a vital destination for global investors." - Klaas Oskam, CEO, DC Advisory India
Download the full report below
What's driving deal flow in the second half of 2023?
Software / SaaS
"SaaS companies that can meet the current demands and
expectations of the market are expected to garner strong
investor interest, despite valuation pressures - potentially making 2023 the year of attractive, investible SaaS assets." - Nishant Malhotra, Managing Director
Consumer-tech
"Overall asset quality in the sector is likely to improve on the back of a shift in investors’ focus to consistent compounders with positive unit economics and a path to profitability, which will drive increased deal activity in the coming year." - Meherzad Kelawala, Managing Director
Financial Services - Lending
"Financial services is experiencing a ‘purple patch’ for
dealmaking. With asset quality issues now in the rear-view
mirror, the sector is now benefitting from strong growth
tailwinds, and a portfolio of more mature and scaled-up
assets, presenting unprecedented opportunities for
investors and corporates." - Abhijit Chiripal, Managing Director
Education
"We expect deal activity to pick up in the second half of 2023. The test prep sector continues to generate excitement as prominent players introduce hybrid offerings, combining online and offline educational resources. A consolidation trend is emerging, with key Ed-tech players actively seeking to acquire regional counterparts, thereby enhancing their market presence in specific geographic areas." - Nitin Bhatia, Managing Director
IT Services
"Despite short-term softness in deal activity, the IT Services
sector is expected to remain attractive, owing to its long-term
predictability and the fundamental strength of its business
model. We expect specialized sub sectors, such as cloud,
digital product engineering, and healthcare-focused services
to remain in high demand as PE sponsors execute their buy
and build strategies." - George Anthraper, Managing Director
Industrials & Logistics
"Industrials is a diverse sector with distinct opportunities.
We anticipate ongoing fundraising activity in the EV and
EMS sectors, as well as a growing number of M&A
prospects in logistics and specialty chemicals
throughout the year." - Anil Ujwal, Managing Director
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