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Key reports in this edition:
Indian real estate by Knight Frank
India credit card data by IDBI Capital
India’s story of seven ‘D’s by CLSA
India Beauty Trends 2024 by Nykaa and Redseer
From telco to techco by KPMG
The CEO’s guide to India by BCG
KEY DEALS
Equity
AdonMo, an adtech startup, raised c.$25 million in a funding round led by Rigel Capital and Sinar Mas. (September 24, 2024)
Homelane, an interior services startup, raised c.$27 million from Hero Enterprise, Claypond Capital, Manipal Group Family Office, and Westbridge Capital to fund the acquisition of DesignCafe, a home interior design company, for an estimated c.$360 million. Homelane also . (September 25, 2024)
Atlys, a visa processing platform, raised c.$20 million in a Series B funding round led by Peak XV Partners and Elevation Capital. Other investors include DST Global, and Headline. (September 24, 2024)
Nurix AI, a custom AI agents for enterprise services startup by ex-Myntra founder Mukesh Bansal, raised c.$28 million in funding round led by General Catalyst, Accel, and Meraki Labs. (September 24, 2024)
[Expected] InCred Capital, wealth and institutional arm of the InCred Group, is looking to raise c.$50 million led by family offices. (September 30, 2024)
[Expected] Authum Investment and individual investors are looking to acquire c.47% stake in Prataap Snacks, an Indore-based snack maker, for an estimated c.$100 million. (September 27, 2024)
[Expected] KKR to sell its c.63% stake in Avendus Capital for an estimated c.$400 million. The deal has not been closed yet. (September 25, 2024)
[Expected] Saatvik Solar, a solar PV module manufacturer, is looking to raise c.$260 million through offshore investors to set up 2 GW solar cells manufacturing unit. (September 26, 2024)
Other Credit Deals and Issuances
HDFC Life is looking to raise c.$180 million through issuance of NCDs at c.8% coupon rate. (September 28, 2024)
Bank of India raised c.$300 million through issuance of tier-two bonds at a coupon rate of 7.5%. (September 26, 2024)
KEY FUNDS AND FUNDRAISES
SCOPE, a startup networking platform and VC fund, launched its second fund with a target corpus of c.$50 million to invest in fintech and gaming sectors. (September 26, 2024)
Oister Global and Tribe Capital have partnered to launch a new fund with a target corpus of c.$500 million focusing on secondary transactions in Indian private markets. (September 26, 2024)
Optimistic Capital, a domestic alternative investment fund, launched a microbreweries-focused fund with a target corpus of c.$25 million. (September 23, 2024)
MGF-Kavachh, a domestic alternative investment fund, raised c.$48 million to invest in startups in defense, space and deep tech sectors. (September 22, 2024)
MARKET INSIGHTS & RESEARCH
Reports
Knight Frank’s report on ‘Indian real estate’ outlines that the office and residential real estate markets are thriving, with rising demand, particularly in premium housing, and a robust office market driven by GCCs and flexible workspaces. Sales volumes grew at an c.30% CAGR since 2020, reaching a 10-year high in 2023. The market fundamentals remain solid, with continued sales growth & price increases.
IDBI Capital’s report on ‘Credit card data’ shows that in Aug 2024, total credit card spends in India declined by 2.6% m-o-m to $20.4 billion, after a strong growth of 8.7% in July. Y-o-y growth in credit card spends also slowed to 13.2%, vs 19.3% in July. The number of credit cards rose by 15.6% y-o-y, reaching 105.5 million, while transaction volumes increased by 34.2% y-o-y.
CLSA’s report on ‘Story of seven ‘D’s’ highlights that India's economic growth is driven by 7 key factors - high GDP growth rate, better demographics, strong corporate financial discipline, with low leverage, stable earnings growth, strong markets and development in key sectors. Nominal GDP to double by 2030 to reach $7 trillion.
Nuvama’s report on ‘Footwear trends’ shows that the industry is facing slow demand recovery, with Q2FY25 expected to mirror the trends of Q1FY25. Despite industry challenges, investments in backend improvements and designs, suggest that companies are positioning themselves for growth once demand rebounds.
Nykaa and Redseer’s report on ‘Beauty trends’ projects India's BPC market to reach c.$34 billion by 2028, driven by 25% CAGR in online channels. E-commerce to account for 33% of BPC sales by 2028, with premium products growing at 20%+ CAGR driven by the rise of Gen Z/ Tier 2+ consumers. New formats and influencer driven trends are expanding consumer engagement and innovation in the sector.
KPMG’s report ‘From telco to techco’ highlights that telecom companies are under pressure from shrinking margins, competition, and expectations, leading them to evolve into techcos — innovative, customer-focused companies, focusing on areas like 5G, cloud services, and IoT. While B2C revenues stagnate (1.6% in 2022), B2B growth (5.6%) remains strong as companies digitalize.
PWC’s report on ‘Sustainability as the CDO/CIO’s agenda’ outlines that integrating ESG principles into digital strategies has become essential for achieving sustainable growth and meeting evolving regulatory demands. Digital transformation, along with advanced technologies, can enable businesses to innovate, improve efficiency, and create long-term value while focusing on ESG.
BCG’s report ‘The CEO’s guide to India’ shares that India’s growth is driven by its young population, supply chain realignments, and digital infrastructure. While the growth outlook is strong, doing business in India remains complex due to state-level variations and infrastructure challenges. CEOs must navigate these nuances carefully to capitalize on India’s burgeoning opportunities.
KPMG’s report on ‘Sustainability learning’ highlights India's drive towards sustainability, supported by its "Viksit Bharat" program and Net Zero goals. Organizations must embed ESG into their culture, focusing on sustainability learning, green skilling, and innovation.
Articles
Indian startup funding surged by 53.1% in the first eight months of 2024, reaching $7.5 billion, vs $4.9 billion during the same period in 2023. The number of VC deals increased slightly, with 780 deals in 2024 vs 742 in 2023, indicating larger deal sizes this year. Read more.
PE and VC firms are increasingly capitalizing on secondary market optimism, with the share of offer for sale (OFS) in IPOs surpassing fresh capital raised in 2024. By August, OFS accounted for 50.37% of the total issue size, raising c.$3.2 billion, slightly more than c.$3.1 billion from fresh issues. This marks a shift from earlier in the year when fresh issues dominated. Read more.
Asset managers predict a surge in investment activity in consumer tech startups, driven by growing early-stage companies and VC interest. After a sharp decline from $21 billion in 2021 to $4 billion in 2023, valuations in the sector have become more rational, with stricter evaluation criteria, particularly in areas like edtech and health tech. Read more.
In 2024, new-age companies made a strong comeback in the stock market, raising c.$1.8 billion through six major IPOs, including Ola Electric and Firstcry, marking the best year for fundraising since 2021. Since 2019, 21 such companies have raised c.$8.2 billion, with more IPOs, like Swiggy and MobiKwik, expected later this year. Read more.
The foundation of India's startup ecosystem over the past decade has largely been built on foreign capital, with limited domestic involvement. As the ecosystem enters its next phase of growth, domestic capital is expected to play a more significant role in driving future development. Read more. [Paywall]
KPIs
RBI's Monetary Policy Committee is expected to start easing interest rates by December 2024, driven by an improved domestic inflation outlook, projected to be 30 basis points below the RBI's 4.5% forecast for FY25, and a global trend towards monetary easing, according to a UBS report.
India improved its ranking in the Global Innovation Index by 42 positions over the past nine years, now ranking first among 38 lower-middle-income economies. This achievement underscores India's growing leadership in innovation, especially as a key driver of technological and economic progress in developing economies.
By FY2031, the number of Indian households earning over INR 3 million annually will increase by 110+ million, according to a U Grow Capital report. Additionally, middle-class households are projected to rise by 280+ million.
WEEKLY MARKET UPDATE (w/c September 23, 2024)
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