India In Sight #67
India In Sight #67
Weekly updates on Indian private markets.
We are Ambassador Capital Partners, an investment firm with a focus on private credit and private equity. Deeply embedded in the private markets ecosystem, ACP works with large global institutions to provide creative capital solutions for companies and asset managers.
In the spirit of making Indian private markets more accessible and transparent to global LPs and GPs, we have launched ‘India In Sight’ – consolidating and curating relevant information and insights from Indian private markets including trends, key deals, fundraises, KPIs, and top tier research
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Key reports in this edition:
Unlocking India’s export opportunity by KPMG and Google
Transforming warehouses: Achieving efficient logistics for Viksit Bharat by PWC
Wealth management- Rising industry by Centrum
Enhancing the digital transformation of financial institutions by PWC
India consumer- Anatomy of factors indicate revival; valuations to rise by Centrum
Chartbook 2024 by AngelOne Wealth
KEY DEALS
Equity
[Exit] Ivanhoe Cambridge, real estate arm of CDPQ, sold its stake in Mumbai-based digital infrastructure platforms, to its partner Macrotech Developer for c.$30 million. Lodha Developers, Ivanhoe Cambridge and Bain Capital formed a platform in 2022 to invest c.$1 billion for creating 30 million square feet of digital infrastructure assets across India. (September 20, 2024)
EQT acquired 100% stake in IndoStar Home Finance, a housing finance company, from IndoStar Capital Finance, its parent company, for c.$210 million. (September 20, 2024)
Physics Wallah, an EdTech unicorn, raised c.$210 million in its Series B funding round led by Hornbill Capital through primary and secondary transactions raising its valuation to c.$2.8 billion (2.5x+ increase from its previous valuation of c.$1 billion). Other investors include Lightspeed Venture Partners, GSV Ventures and WestBridge Capital. (September 20, 2024)
Aye Finance, a microlending platform, raised c.$30 million in its Series G funding round led by ABC Impact, a Pan-Asian impact investor backed by Temasek. Other investors include BII. (September 20, 2024)
Everest Fleet, a a fleet management company, raised c.$30 million as a part of its ongoing c.$50 million Series C funding round, led by Uber India. (September 20, 2024)
Redcliffe Labs, an omnichannel diagnostics service provider, raised c.$42 million in a Series C funding round led by IFU, a Denmark-based investment firm. Other investors include LeapFrog, HealthQuad and Spark Growth Ventures. (September 17, 2024)
iBUS, a digital infrastructure solutions provider, secured c.$34 million from IFC for a minority stake in the company. (September 17, 2024)
Whatfix, a SaaS firm, raised c.$100 million in primary and secondary funding led by Sweet Nectar Investments (Warburg Pincus) and SoftBank. (September 15, 2024)
[Expected] M2P Fintech, a software services provider, raised c.$50 million from Taj Investment Holdings. Company is raising c.$80 million in a mix of primary and secondary transactions, at an estimated valuation of $850-900 million. (September 20, 2024)
[Expected] Kapiva, a D2C ayurvedic brand is looking to raise c.$40 million in an internal round to expand operations and grow its market presence led by OrbiMed, Fireside Ventures, Vertex Ventures, and 3one4 Capital. (September 19, 2024)
[Expected] Lightspeed to invest c.$60 million in Qure.ai, an AI based platform offering decision support tools for diagnostic images. (September 18, 2024)
[Expected] Infra.Market, a construction materials platform, is looking to raise c.$150-200 million in a fresh round of funding ahead of its IPO. Existing backers Tiger Global, Foundamental and Evolvence will infuse more capital and increase their stake. (September 16, 2024)
Other Credit Deals and Issuances
Mankind Pharma, a pharmaceutical company, is looking to raise c.$1.2 billion through issuance of NCDs and commercial papers on the basis of private placement. (September 20, 2024)
KEY FUNDS AND FUNDRAISES
Capital A, a domestic venture capital firm, launched its second fund with a target corpus of c.$48 million. This fund will be focused in investing in manufacturing, deeptech, climate and fintech startups. (September 19, 2024)
Shivalik Group, a real estate developer in Ahmedabad, marked its first close of its to its maiden real estate fund at c.$10 million. The fund has a target corpus of c.$20 million. (September 19, 2024)
z21 Ventures, an early-stage venture capital firm, marked the first close of its second fund at c.$20 million. The fund has a target corpus of c.$40 million and is anchored by Westbridge Capital. (September 19, 2024)
MARKET INSIGHTS & RESEARCH
Reports
KPMG & Google’s report on ‘Unlocking India’s export opportunity’ highlights the crucial role of digital platforms in boosting India's export growth. India’s exports are expected to grow from $770 billion to $1.7 trillion by 2028 while digitally influenced exports are expected to exceed $100 billion by 2028. Key drivers include global digital trade, strengthened manufacturing, and proactive government initiatives across key sectors like travel, retail, and services.
PWC’s report on ‘Transforming warehouses’ outlines that the logistics and warehousing sectors are essential for improving supply chain efficiency and reducing costs. Growth is driven by government initiatives, tech, and the rise of e-commerce. The adoption of modern warehouses, including Grade A facilities (20-25% CAGR over last 5 years), and the use of third-party logistics (3PL) services are key trends.
PWC’s report on ‘Digital transformation of financial institutions’ emphasizes the rapid digital transformation of the financial services sector, driven by advancements in AI, cloud tech, and digital infra which is essential for improving flexibility, scalability, and security, allowing banks to meet evolving customer expectations and regulatory demands.
S&P Global’s report on ‘India forward- Emerging perspective’ highlights that India is emerging as a global leader driven by structural reforms, AI sector opportunities, and energy transitions. In FY2024, growth surprised on the upside at 8.2%, exceeding the 7.3% estimate. Growing geopolitical influence and the inclusion of Indian bonds in global indexes could further boost India.
AngelOne Wealth’s ‘Chartbook 2024’ provides detailed charts and analysis on Indian markets. IPO market has surged (c.25% of global IPO volumes in H1 2024), with 178 new IPOs, outpacing major global markets like China and US. India now holds the highest number of mainboard listed companies globally (c.5,500).
Centrum’s report on ‘Wealth management - Rising industry’ shares that India's wealthy population is rapidly growing, with HNI and UHNI financial assets projected to increase from c.$1.2 trillion in 2023 to c.$2.2 trillion by 2028. However, c.15% of financial wealth is professionally managed vs 75% in mature markets. The mutual fund and AIF industries have also demonstrated significant growth.
Centrum’s report on ‘India consumer sector’ highlights that rural demand recovery, rising real wages, and favorable conditions are expected to drive volume growth in the sector. Food companies are likely to outperform, while retail is projected to see high growth, especially in jewelry and value apparel.
Colliers report: ‘Global capital flows H1 2024’ underscores that Asia Pacific remains a key global capital hub, with Singapore, Hong Kong, Japan, and China among the top 10 global capital sources in H1 2024. Japan, China, and Australia ranked as major destinations for cross-border capital.
Articles
The startup secondary market has seen a surge in deals in the first half of the year, many of which occurred at discounted valuations. The emergence of new secondary funds has provided some relief to LPs, who have faced challenges with long-term primary investments. However, the outlook remains cautious, as few companies can sustain their peak 2021 valuations, leading to significant discounting in secondary transactions. Read more. [Paywall]
The finance ministry is working to enhance India's global financial standing through secure and inclusive digital payment solutions. With UPI's global expansion, India now accounts for 49% of global real-time transactions, driving significant growth in digital payments and promoting financial inclusion and economic empowerment. Read more. [Paywall]
India's digital transformation, driven by the Digital India Mission, has positioned the country as the world's third-largest digitalized nation. With e-commerce expected to reach c.$350 billion by 2030, the key question is how MSMEs can leverage this digital growth to integrate into the expanding digital ecosystem. Read more.
Multinational companies are increasingly choosing to list their subsidiaries in India, seeking higher valuations. This trend is expected to motivate startups to pursue Indian listings, driven by the country's economic growth and opportunities for tech companies to expand market capitalization. Read more.
KPIs
Household consumption is expected to accelerate in the Q2, driven by easing inflation and a recovery in rural demand. Slower retail inflation is supporting increased private consumption and investment. However, fluctuations in food prices pose a potential risk. The RBI forecasts real GDP growth of 7.2% for the current fiscal year.
Indian economy could be 90-100% larger than China by end of century. Global leaders are optimistic about India's economic future and the growing India-US partnership, emphasizing India's potential to become a key global economic powerhouse.
Below is a quick snapshot of the services sector performance from the latest RBI bulletin September 2024.
WEEKLY MARKET UPDATE (w/c September 16, 2024)
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