India Private Equity Mid-Market Monitor: July 2024 - 'A tale of two markets'
Date
July 05, 2024 • 1 min read
The Indian landscape is currently a tale of two markets - while the euphoria in public markets continues, private markets paint a more somber picture, with deal volumes down approximately 64% compared to the highs of 2022.
DC Advisory’s India team discusses the key drivers behind this public vs private divergence, the opportunities, and the implications for investors and founders, including:
- How public markets are impacting private markets
- The startup landscape
- Outlook for the next 12 months
As featured in The Economic Times >
A note from India CEO, Klaas Oskam:
“While Indian public markets have reached record highs and continue to outperform global peers, private markets are undergoing a strategic reset, with a key focus on long-term value creation. India, currently the world's fastest-growing major economy, remains a powerful destination for investors seeking to capitalize on its ongoing growth trajectory.” - Klaas Oskam, CEO, DC Advisory India
The story so far...
- A period of market correction is leading to more conservative valuations for private companies. While lower valuations may attract some investors, we continue to see startups face challenges securing primary capital. Internal funding rounds and down rounds are becoming increasingly common, and in many cases, the main source of primary capital for Indian startups.
- Secondaries and buyouts activity of profitable compounders are on the rise. As a result, we are seeing startup founders focus on rationalizing cost structures.
- Investors prioritize sustainability vs growth. Hedge funds’ ‘growth-at-all-costs’ strategies are waning. Instead, private equity, sovereign wealth funds, late-stage VCs, family offices, and crossover investors are adopting more traditional growth equity risk and return approaches, emphasizing profitable models and long-term value creation.
- Traditional sectors are outperforming new-age tech sectors. Sectors with established offline operations - such as Financial Services, Healthcare, Industrials, Consumer, and Infrastructure - are showing more resilience compared to online-first counterparts in Fintech, Online Consumer, HealthTech, and EdTech.
Download the full report below
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