India In Sight #71
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:
PE/VC roundup 3Q2024 by EY-IVCA
How Gen Z is shaping the new India by BCG
Pharma and Healthcare Dealtracker 9M 2024 by Grant Thornton
Role of financial services in making of Viksit Bharat – Vision 2047 by PWC
Sector notes on India chemicals (by Axis Capital) and Securities broking industry (by ICRA)
KEY DEALS
Equity
Stellapps, a dairy tech and solutions startup, raised c.$26 million in a mix of equity and debt from Blume Ventures, Omnivore, Bill & Melinda Gates Foundation, IDH Farmfit Fund, 500 Global (formerly 500 Startups), Blue Ashva Capital, Miledeep Capital, and US DFC. (October 21, 2024)
upGrad, an Edtech unicorn, raised c.$60 million from Temasek at an estimated valuation of c.$2.2 billion. (October 21, 2024)
Eruditus, an edtech unicorn, raised c.$150 million in a Series F funding round led by The Rise Fund (TPG’s global impact investing platform). Other investors include Softbank Vision Fund 2, Leeds Illuminate, Accel, CPP Investments, and Chan Zuckerberg Initiative. (October 18, 2024)
Weaver Services, a non-bank lender, secured a commitment of c.$95 million from Gaja Capital and Lok Capital to acquire Capital India Home Loans, a housing finance company for an estimated c.$32 million. (October 17, 2024)
Everstage, a B2B SaaS startup, raised c.$30 million in a Series B funding round led by Eight Roads Ventures. Other investors include Elevation Capital and 3one4 Capital. (October 16, 2024)
Primus, a senior care and living company, raised c.$20 million in a seed funding round led by General Catalyst. Other investors include Nikhil Kamath (Founder of Zerodha) and Gruhas VC Fund. (October 16, 2024)
Neuron7.ai, a service resolution intelligence platform, raised c.$44 million in a Series B funding round led by Smith Point Capital. Other investors include Nexus Venture Partners and Battery Ventures. (October 15, 2024)
Giva, an omnichannel jewelry startup, raised c.$30 million in an extended Series B round with a primary and secondary infusion led by Premji Invest, Epiq Capital, Edelweiss Discover Fund, and its senior management. (October 14, 2024)
Purplle, an omnichannel beauty platform, raised c.$180 million in a Series F funding round led by ADIA, Premji Invest, Blume Ventures, and Sharrp Ventures. Purplle had previously raised c.$120 million in July as part of the same funding round. (October 14, 2024)
[Expected] Fullerton (subsidiary of Temasek) to acquire controlling stake in Lendingkart, a digital lending platform, along with a capital infusion of c.$30 million, to enhance its technology and expand its reach into underserved markets. (October 18, 2024)
[Expected] Zepto, an online grocery delivery and quick commerce app, is looking to further raise c.$100 million in a new investment. This will be Zepto’s third funding round in 2024. (October 17, 2024)
Other Credit Deals and Issuances
SBI is looking to raise c.$600 million through issuance of Tier-1 (AT-1) bonds. (October 14, 2024)
KEY FUNDS AND FUNDRAISES
Titan Capital, an early-stage venture capital fund, marked the final close of its maiden opportunities fund with a target corpus of c.$40 million. (October 21, 2024)
MARKET INSIGHTS & RESEARCH
Reports
EY-IVCA’s ‘PE/VC roundup 3Q2024’ highlights that PE/VC investments in 3Q2024 totaled $8.8 billion, down 40% y-o-y vs 3Q2023 ($14.6 billion) and down 45% vs 2Q2024 ($16 billion). With 283 deals, 3Q2024 recorded 26% y-o-y growth vs 225 deals in 3Q2023, and a 12% decline vs 321 deals in 2Q2024. Buyouts was the largest segment at $2.7 billion across 13 deals, down 25% y-o-y vs 3Q2023 ($3.6 billion). Growth investments was second largest with $2.6 billion across 49 deals, a 40% decline from US$4.4 billion across 39 deals in 3Q2023.
BCG’s report on ‘How Gen Z is shaping the new India’ highlights how India’s Gen Z, a 377 million-strong cohort, is reshaping consumer behavior, currently driving $860 billion in spending, projected to reach $2 trillion by 2035. Gen Z prioritizes trends over brands, values immersive visuals, and relies heavily on their inner circles for purchase decisions, influencing sectors like fashion, travel, and beauty.
Grant Thornton’s ‘Pharma and Healthcare Dealtracker’ highlights a 50% increase in deal volumes for 9M 2024, reaching 177 deals, with a total value of c.$2.8 billion. M&A activity rose by 44%, driven by domestic deals, while PE activity fell to 33 deals worth c.$250 million (90% down). The largest deal was Mankind Pharma’s $1.6 billion acquisition of Bharat Serums and Vaccines. The pharma and biotech segment accounted for 79% of overall deal values.
PWC’s report on ‘Role of financial services in the making of Viksit Bharat – Vision 2047’ highlights that key initiatives like UPI (14.4 billion transactions in July 2024) and Aadhaar (1.38 billion issued IDs) are driving financial access on the back of digital public infrastructure. Focus areas include expanding credit to MSMEs, women entrepreneurs, and rural sectors, sustainable and secure finance.
Axis Capital’s report on ‘India chemicals’ highlights how India's chemical sector is benefiting from global supply chain derisking, with companies increasing R&D efforts and expanding capacities. While China's aggressive capacity growth has pressured global chemical prices, Indian firms are leveraging technical innovation and partnerships to capture market share.
PWC’s report on ‘The role of crop-protection industry in driving sustainability in agriculture’ emphasizes the crucial role of India's crop protection industry, the fourth-largest globally, in boosting agricultural productivity. It highlights efforts to adopt sustainable practices like integrated pest management (IPM), bio-pesticides, and green chemistry to reduce environmental impact and mitigate crop losses, which account for 30-40% of annual yields.
ICRA’s note on ‘Securities broking industry’ highlights SEBI's new measures to strengthen the index derivatives framework for market stability and investor protection. These include increasing contract sizes and margins, which may lead to a 30% dip in trading volumes, especially impacting discount brokers reliant on F&O revenues. Stockbrokers are expected to recalibrate their business models, potentially raising brokerage fees to offset revenue losses.
PWC’s report on ‘Climate risk management for financial institutions’ highlights the importance of climate risk management for financial institutions, focusing on regulatory frameworks by RBI and IRDAI. It emphasizes assessing climate-related risks through scenario analysis, stress testing, and measuring financed emissions to integrate sustainable finance strategies.
Articles
Since 2016, 1.6+ million Indians have renounced their citizenship. India witnessed a 28x rise in outward remittances under the Liberalised Remittance Scheme (LRS), with investments abroad reaching $31.7 billion in 2024 (vs $1.1 billion in 2014). The rise is driven by growing wealth, globalization, and more opportunities abroad. HNIs are seeking better career and lifestyle options, along with access to global markets. Read more.
India's inclusion in global bond indexes is attracting global fund managers, aligning with the vision for a developed India by 2047. This surge in investor interest aims to drive foreign capital into infrastructure and private credit markets while addressing regulatory and market challenges. Read more.
AI agents are going beyond chatbots by autonomously performing tasks, making decisions, and optimizing workflows across industries like sales, customer service, and marketing. Indian startups are offering flexible pricing models and leveraging AI to enhance operational efficiency, automate tasks, and boost ROI for businesses. Read more.
PE / VC firms have traditionally been different in risk appetite, but PE funds are increasingly taking VC-like risks by investing in growth-stage startups, driven by the surge in startup IPOs and secondary exits. While PE backing often adds maturity to companies, many PE-funded startups have yet to fully justify their high valuations. Read more. [Paywall]
Booming public markets, fueled by domestic liquidity and foreign investor interest, have seen over 80 IPOs this quarter, making 2024 a record year for equity issuances. Private markets focus on pre-IPO placements, with c.$1.2 billion raised, as companies opt for public listings over private financing. Read more.
India, now the world’s second-largest telecommunications market with 1.2 billion subscribers, is driving the need for robust legislative frameworks to support growth, digital inclusion, and advancements in manufacturing and R&D. Regulatory changes aim to enhance infrastructure investment, service quality, and customer protection, fostering a sustainable ecosystem. Read more.
KPIs
India's taxpayers increased by 82% from 2014-15 to 2023-24, with direct tax receipts surging by 1.8x, largely driven by higher personal income tax collections and better compliance. Total direct tax receipts reached $236+ billion in 2023-24, aided by effective tax administration and the use of advanced technological tools.
India's retail inflation rose to 5.49% in September, driven by higher vegetable prices and a lower year-ago base, surpassing the RBI’s 4% medium-term target. This increase follows a five-year low of 3.65% in August.
Below is a quick snapshot of the services sector performance from the latest RBI bulletin October 2024
WEEKLY MARKET UPDATE (w/c October 14, 2024)
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