India In Sight #65
India In Sight #65
Weekly updates on Indian private markets with special section on India Fintech @ GFF 2024
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Key reports in this edition:
The State of Indian startup ecosystem report 2024 by Inc42
Banking for a Viksit Bharat by BCG x FICCI
Seizing the ER&D advantage frontiers for 2030 by BCG x Nasscom
Navigating the SM REIT landscape by CBRE
How India lends - Credit landscape in India FY2024 by CRIF
Multiple reports on Fintech by PWC
📌 Check out our special section on India Fintech @ GFF 2024
KEY DEALS
Equity
Rapido, a ride hailing platform, raised c.$200 million in a fresh Series E funding round led by Westbridge Capital at a valuation of c.$1 billion. Other investors include Nexus Venture Partners, Think Investments and Invus Opportunities. (September 05, 2024)
Data Infrastructure Trust, an infrastructure InvIt sponsored by Brookfield, raised c.$940 million via rupee bonds to acquire the Indian operations and assets of American Tower Corp, a global provider of digital communications infrastructure, for its c.$2.5 billion acquisition. (September 05, 2024)
Central Warehousing Corporation, a public warehouse operator, has partnered with Horizon Industrial Parks, an industrial and logistics park managed by Blackstone, under private-public partnership model to develop Grade A warehouse across India with an estimated investment of c.$85 million. (September 02, 2024)
[Expected] National Investment & Infrastructure Fund (NIIF), India’s sovereign infrastructure fund, is looking to raise c.$4 billion in its next fundraise round in early 2025. (September 05, 2024)
[Expected] Mintifi, a digital lending startup, is looking to raise c.$100 million from multiple private equity funds to expand its loan book. (September 02, 2024)
Other Credit Deals and Issuances
Drip Capital, a digital trade finance platform, raised c.$113 million in mix of debt and equity in a new funding round. Drip raised c.$90 million in debt from IFC and East West Bank and c.$23 million in equity from GMO Payment Gateway and Sumitomo Mitsui Banking Corporation. (September 05, 2024)
Bank of Baroda raised c.$600 million through issuance of Infrastructure bonds at a coupon rate of c.7.3%. (September 06, 2024)
Canara Bank raised c.$300 million through issuance of five year bonds at c.5% semi annual coupon. (September 04, 2024)
Axis Bank raised c.$470 million through issuance of infrastructure bonds at a coupon rate of c.7.5%. (September 04, 2024)
Vedanta Resources is looking to raise c.$1.5 billion through issuance of dollar bonds at c.10% coupon to refinance its existing debts. (September 03, 2024)
Moneyview, a lending platform, raised c.$30 million in debt through private placement from Apis Partners, Accel Partners, and Evolvence India. (September 02, 2024)
KEY FUNDS AND FUNDRAISES
VentureSoul Capital marked the first close of its maiden investment vehicle with a target corpus of c.$36 million. The fund will invest in companies across sectors in the new economy space. (September 06, 2024)
INDIA FINTECH @ GFF 2024
The recently concluded Global Fintech Fest (GFF) 2024 was a significant event in the fintech industry, held in Mumbai. This GFF edition saw participation from over 65K attendees from 100+ countries with 800+ speakers, 350+ sessions, covering a wide range of fintech topics.
Key themes during the event included:
The growing importance of AI in finance
The need for financial inclusion
Building resilient financial systems
Below is a curated collection of key reports launched during GFF 2024 providing a comprehensive overview and analysis of India's fintech landscape.
📝 Imagining Fintech opportunities in a $10 trillion economy by EY
📝 Fast Forward, Rewind: India's Golden Decade in Fintech by Finvu
📝 Small is Big: How Fintechs are revolutionising Lending by Experian
📝 Insurance for All: Enhancing insurance coverage across India by EY
📝 Navigating India’s evolving financial landscape with WealthTech by EY
📝 UPI for Her by NPCI
📝 RuPay NCMC – Leading the way in smart mobility payments by NPCI
📝 Financial Freedom: The Rise of Credit Self-Monitoring by TU CIBIL
📝 How Urban India pays by Kearney x Amazon Pay
📝 Indian Payments Handbook by PWC
Covered in this edition below (refer to the ‘Reports’ section)
📝 Mapping the FinTech Innovation Landscape in India by PWC
📝 Indian fintech journey- From evolution to mega public listings by JM Financial
📝 Superapps: Breaking down barriers, building bridges by PWC
📝 Digitizing supply chain finance – opportunities amidst constraints by PWC
📝 Investing in India’s Fintech disruption by PWC
Covered in previous edition (refer to the ‘Reports’ section)
📝 Building Bridges for the next decade of finance by BCG
📝 State of the Fintech Union 2024 by BCG
MARKET INSIGHTS & RESEARCH
Reports
Inc42’s report on ‘The state of Indian startup ecosystem report 2024’ states that the Indian startup ecosystem attracted over $150 billion in investments during 2014-H12024, with ecommerce, fintech, and enterprise tech leading the charge, contributing to 52% of the total funding. India has 9.5K+ active startup investors with total funding expected to reach $170 billion by 2025. AI and semiconductors are projected to reach $17 billion and $150 billion in market opportunities by 2030, respectively.
‘Banking for a Viksit Bharat’ report by BCG & FICCI outlines that India aims for a $30 trillion GDP by 2047, requiring the financial sector to grow by 20x, with banks playing a pivotal role. The banking sector will need $4 trillion in capital. With a strong foundation in profitability, capital adequacy, and low NPAs, banks must innovate deposit products, improve asset quality, and enhance digital maturity.
BCG & Nasscom’s report on ‘Seizing the ER&D advantage frontiers for 2030’: shares that global ER&D spending in the auto sector is expected to reach $460-$540 billion by 2030 at 8-9% CAGR, driven by three key trends: increasing vehicle digitization, sustainability, and AI adoption. There is significant opportunity for Indian auto OEMs who must optimize software development costs and integrate AI into design.
CBRE’s report 'Navigating the SM REIT landscape - A look at regulations and implications’ shares that in March 2024, SEBI introduced regulations SM REITs to create a clear framework for Fractional Ownership Platforms (FOPs), where investors pool funds to invest in real estate assets. With India's REITs and InvITs mobilizing INR 1.3 trillion since FY2019-20, the potential of SM REIT market is estimated at c.$60 billion, covering 300 million sq. ft. of commercial space.
PWC’s report ‘Digitizing supply chain finance – opportunities amidst constraints’ emphasizes that in India, SCF is particularly crucial due to the large number of MSMEs, which contribute 30% to the GDP and 40% to exports but face significant credit gaps (c.$300 billion) and delayed payments (c.$120+ billion). SCF solutions, supported by platforms like RBI’s TReDS and digital advancements, are helping MSMEs access timely financing, enhancing supply chain resilience.
CRIF report on ‘How India lends - Credit landscape in India FY2024’ analyzes lending trends and offers insights across major product categories. Consumption loans, MSME loans, Microfinance loans grew by 15%, 18% and 27% yoy, respectively, in March 2024. Financial institutions played a significant role, though growth in loan originations was muted, except for individual MSME loans.
PWC’s report on ‘Investing in India’s Fintech disruption’ highlights that India's Fintech sector attracted c.$20 billion in funding in the past five years, representing 21% of total startup funding. Key emerging trends include rising global investments, digital banking, embedded finance, with opportunities in payments, lending, and enabling tech.
JM Financial’s report on ‘Indian fintech journey- From evolution to mega public listings’ shows that with 26 unicorns and 120 soonicorns, India’s fintech sector has a combined market cap of $120+ billion and is poised for further growth, with 65+ companies potentially going public in the next seven years. Key areas like payments, lending, and wealth management are expected to benefit.
PWC’s report on ‘Superapps: Breaking down barriers, building bridges’ highlights that the development of superapps is rising. The addition of digital payments and embedded credit, such as buy now, pay later (BNPL), have made superapps more attractive by lowering customer acquisition costs and expanding financial access.
PWC’s report on ‘Mapping the Fintech innovation landscape in India’ highlights the importance of collaborative innovation between established companies and Fintechs to accelerate market entry, enhance customer experiences, and optimize costs. While partnerships bring benefits like faster account opening and new products, challenges such as talent shortages and system integration remain.
Nuvama’s report on ‘Gen AI - The enigma, the opportunity’ highlights that the Indian IT Services industry faces potential disruption from Gen-AI, raising concerns about short-term growth, but experts predict long-term opportunities similar to previous technological shifts. Growth is expected to rebound by FY25, driven by a lower interest rate regime and increasing digitization efforts.
Nuvama report on ‘Hotels: Premium outbound cohort’s travel trends’ highlights that Indian international travel has surpassed pre-COVID levels, growing 14% yoy in 1H 2024, compared to 4% growth in domestic air travel. While volume growth is modest, there is an increasing preference for business class and premium travel, with more demand coming from leisure travel.
KPMG report on ‘SEBI CSCRF’ outlines that the SEBI Cybersecurity and Cyber Resilience Framework (CSCRF) aims to enhance the cybersecurity maturity of SEBI-regulated entities by introducing a Cyber Capability Index (CCI) based on 23 parameters. The framework will be implemented in phases starting January 2025 and covers entities like AIFs, mutual funds, and stock brokers.
Articles
Entrackr’s ‘Indian startup monthly report’ summarizes that in August 2024, Indian startups raised $1.6 billion across 112 deals, marking a significant recovery from the funding winter. This includes $1.32 billion from 27 growth-stage deals and $267 million from 71 early-stage deals, with notable rounds from Zepto ($340 million) and DMI Finance ($334 million). Total funds raised in the first eight months reached $9.6 billion, positioning the ecosystem to surpass the $11 billion raised in 2023.
India's VC ecosystem faced a significant funding decline, dropping from $27.5 billion in 2022 to $9.6 billion in 2023. Despite this, the ecosystem showed resilience with 45% yoy rise in VC funding in H1 2024. Funding is expected to surpass previous years and more deals are expected in the coming months. Read more.
India's paper market (23 million tonnes) is growing rapidly, with packaging paper and paperboard consumption (65% of total paper) increasing by 8.2% in 2023-24. Driven by demand from sectors like FMCG, e-commerce, and healthcare, and boosted by the ban on single-use plastics, the overall paper demand in India is rising by 6-7% annually. Read more.
As part of the IndiaAI mission, the Ministry of Electronics and Information Technology is developing capacities to make AI-usable datasets available through the India Datasets Platform. The $1.3 billion initiative aims to provide startups and researchers with access to non-personal datasets, computing infrastructure, and AI use cases to foster innovation and growth in AI. Read more.
Indian AIFs surpassed $50 billion in total investments for the first time in the April-June quarter. The industry's commitments have reached $140 billion, marking a 40% growth yoy. Read more. [Paywall]
KPIs
India's services sector reached a five-month high in August, with the HSBC India Services PMI rising to 60.9 from 60.3 in July, driven by strong domestic demand and easing inflation. Despite slower international demand growth, firms remain optimistic about future growth, as cost pressures have eased.
India's GST collections surged to c.$21 billion in August, up by 10% yoy. The growth is driven by strong consumption and improved compliance, with import revenues also rising significantly. Experts expect further spikes in collections during the upcoming festive season.
Below is a quick snapshot of the services sector performance from the latest RBI bulletin August 2024.
WEEKLY MARKET UPDATE (w/c September 2, 2024)
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