India In Sight #70
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:
Financial services dealtracker Q3 2024 by Grant Thornton
Solar cell and module market report by Frost & Sullivan
India market monitor Q3 2024 by CBRE
Sector report on India (Asset Management Companies) AMCs by Nomura
Harnessing India’s sports tourism potential by KPMG
KEY DEALS
Equity
Haber, an industrial robotics startup, raised c.$38 million in a Series C funding round led by Creaegis. Other investors include Accel and Beenext. (October 11, 2024)
SPRY Therapeutics, a SaaS platform for physical therapy professionals, secured c.$15 million in a funding round led by Flourish Ventures, Together Fund, Fidelity’s Eight Roads and F-prime Capital. (October 09, 2024)
[Expected] Z47 (formerly Matrix Partners India), a domestic venture capital fund, is looking to sell its stake in various portfolios companies in secondary transactions, which could be worth c.$150-$180 million. Some of the portfolio companies include Ola, B2B firm OfBusiness, Razorpay, and Dailyhunt. (October 10, 2024)
[Expected] Tonetag, a digital payment startup platform, to raise c.$50 million, in a mix of primary and secondary capital from Iron Pillar, a venture growth investor. The deal has not been finalized and announced yet. (October 10, 2024)
[Expected] Rapido, a bike-taxi startup, to raise c.$60 million in a mix of primary and secondary capital from Prosus, a tech-focused investor. This fundraise is a part of an ongoing c.$200 million round. (October 10, 2024)
Other Credit Deals and Issuances
Adani Green Energy is looking to raise c.$1 billion through issuance of dollar-denominated bonds. (October 09, 2024)
KEY FUNDS AND FUNDRAISES
Vishal Khare and Shivam Sinha (former executives from Citrix Systems and Standard Chartered Bank) launched their maiden real estate fund. The exact fund size and other financial details were not disclosed. (October 09, 2024)
MARKET INSIGHTS & RESEARCH
Reports
Grant Thornton’s ‘Financial services dealtracker’ highlights that in Q3 2024, deal activity surged with 72 deals worth c.$5 billion, marking a significant rise in volumes and values over the past two years. M&A deals saw 18 deals worth c.$1.4 billion while PE/VC invested c.$1.9 billion across 46 deals driven by six high-value deals. The banking and NBFC sectors led with 55% of the total deal value, while fintech dominated in deal volumes with 61%.
Frost & Sullivan’s report on ‘Solar cell and module market’ shows that the market is rapidly growing, with domestic module manufacturing capacity reaching 72 GW by FY2024, positioning India as the third-largest manufacturer globally. The market is projected to grow at a 40%+ CAGR, reaching 58 GW consumption by FY2028. Key drivers include PLI schemes and 300 GW solar capacity target by 2030.
CBRE’s report ‘India market monitor Q3 2024’ outlines that India's real estate market saw c.$9 billion in equity investments in 9M 2024, (up by 46% yoy). Key investments were driven by institutional and developer activity (79% domestic investors), with equity inflows focused on land (45%) and office spaces (24%). Investments could reach $11 billion by year-end, with focus across residential, retail, data centers, and logistics sectors.
Nomura’s report on ‘India AMCs’ highlights that India’s asset management industry is set to grow at an 18% CAGR between FY24 and FY30, driven by a rise in equity AUM (20% CAGR) and passive AUM (24% CAGR). Mutual fund penetration stands at 18% of GDP as retail participation is increasing with SIPs picking up.
KPMG’s report on ‘Harnessing India’s sports tourism potential’ highlights that India's sports tourism market (c.$11 billion in 2023), is expected to grow at a 17%+ CAGR, reaching c.$53 billion by 2033. It offers significant opportunities for sustainable growth across sectors like wellness and hospitality, esp. in sports infrastructure & equipment in schools, universities, stadium, training facilities.
Social Capital’s report ‘Is India the next economic giant’ states that India is emerging as a potential economic giant, supported by its young workforce and technology sector. By 2030, India is projected to reach $10 trillion in GDP and have the world’s largest working-age population, with over 1 billion people under 35. Digital economy is also growing rapidly, contributing nearly 8% to its GDP.
Grant Thornton’s ‘GST compendium’ reviews the various policy changes and the GST tax regime in India. The Supreme Court has upheld Section 17(5) of the CGST Act, allowing input tax credit (ITC) on GST paid for immovable property construction used for renting or leasing, subject to certain conditions.
Articles
India’s real estate sector saw private equity investments surge to c.$2.2 billion in Q3 2024, up 93% from Q2. The industrial and logistics segment led with c.$1.7 billion (77% of the total), driven by e-commerce demand and government initiatives. Total investments from January to September 2024 reached c.$3.9 billion, surpassing the full-year 2023 figures. Read more.
Secondary investors in India are becoming increasingly active, targeting deals worth overall c.$20 billion, fueled by the sale of PE-held assets. This focus aims to unlock c.$92 billion in unrealized value from investments older than six years. Demand for such transactions has risen, as private equity funds seek to exit their positions. Read more.
SEBI has introduced new norms to expedite the rights issue process, enabling faster fundraising from existing investors by streamlining documentation and using publicly available information. While the changes aim to simplify the process, it is essential to ensure that investors continue to receive comprehensive financial trend analysis and risk information. Read more.
Gold financing is attracting broader interest (Google Pay's partnership with Muthoot Finance to offer gold-backed loans). India's vast gold reserves (25,000 tonnes) and cultural connection to gold make it a valuable asset for securing credit. The rise of gold loans among diverse players reflects growing demand, though risks such as price volatility and lifestyle-based borrowing remain significant concerns. Read more. [Paywall]
B2B e-commerce startups have struggled to penetrate India's unorganized retail space, but quick-commerce platforms like Instamart and Blinkit are pushing the small mom & pop stores to adapt. Startups such as ShopKirana and ApnaKlub are helping these small shops become "quick-commerce-proof" by converting them into dark stores and enabling online orders. Read more. [Paywall]
Despite securing over $1.5 billion in funding between 2014 and 2023, India's deeptech startups remain relatively small compared to global giants. While Indian talent plays a key role in building platforms for companies like Google, Microsoft, and Amazon, India has yet to produce its own major deeptech or AI companies. Read more. [Paywall]
Indian telecom industry is evolving rapidly. Reliance Jio plans to connect 20 million small and medium businesses (SMBs) by bundling 5G broadband, cloud storage, and other solutions. While Jio dominates the retail space with nearly 500 million subscribers, it faces competition from Airtel and Tata in the large enterprise sector. Read more. [Paywall]
KPIs
India's inflation outlook has shifted from a hawkish stance to a neutral one, as the RBI keeps the repo rate unchanged but signals disinflation trends and global rate cuts. The Monetary Policy Committee acknowledged two-way risks from domestic and international factors but maintained an optimistic growth forecast of 7.2% for FY25.
The World Bank has maintained India's GDP growth forecast for FY25 at 7%, driven by higher agricultural production and strong employment growth from policy initiatives, which are boosting private consumption. [Paywall]
The US remains India's largest source of FDI, followed by Mauritius, Singapore, and the UK. In 2023-24, FDI in India increased by 23.3%, driven by valuation gains and new inflows, with nearly 90% of FDI equity coming from non-financial companies. Foreign subsidiaries in India also exhibited strong trade linkages.
The Indian government has announced a buyback auction of government securities c.$3 billion, set to be conducted by the RBI on October 17. The auction will involve five bonds maturing between 2025 and 2026, following several successful buyback operations by the RBI since May.
Low-cost mobile telephony has boosted India's digital capability, with 85% of the population over 15 using mobile phones in 2022-23, up from 70% two years ago. Female mobile usage jumped from 56% to 79%, while male usage reached 92%. Additionally, 40% of people can now conduct banking transactions, and 44% can send emails using their phones.
WEEKLY MARKET UPDATE (w/c October 07, 2024)
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