India In Sight #73
Weekly updates on Indian private markets.
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Key reports in this edition:
Guide to establishing presence in India by Grant Thornton
Energy storage systems by SBI Caps
Exploring the intersection of education and real estate in India by CBRE
Embodied carbon in India infrastructure by KPMG
Rebuilding trust with tamper-proof traceability in supply chains by PWC
KEY DEALS
Equity
Haldiram Bhujiawala, a snack company, raised c.$28 million by selling its minority stake to Pantomath’s Bharat Value Fund. The funds will be used to expand its manufacturing capabilities and enter new markets. (November 9, 2024)
UnifyApps, an enterprise integration-focused firm, raised c.$20 million in a funding round led by Iconiq Growth, a VC firm and other existing investors including Elevation Capital. (November 8, 2024)
Niva Bupa Health Insurance, a health insurance company, raised c.$120 million from its anchor investors ahead of launching its $265 million IPO. Temasek invested c.$12 million and A91 Partners invested c.$14 million. Other investors include Amansa Group, First Sentier Investors, Nippon Life, Tata Mutual Fund, Axis Mutual Fund and Morgan Stanley. (November 7, 2024)
Easy Home Finance, a home financing startup, secured c.$35 million in a funding round led by Claypond Capital and SMBC’s Asia Rising Fund. Other investors include Xponentia Capital, Finsight Ventures, Harbourfront Capital, and Pegasus India Evolving Opportunities Fund. (November 6, 2024)
Swiggy, a foodtech platform, raised c.$600 million from over 75 anchor investors ahead of its IPO. (November 5, 2024)
[Exit] EQT, a Swedish PE firm, sold its stake in Sagility, a tech-enabled healthcare business process management company, for c.$44 million to Adani Properties, Avendus Future Leaders Fund II and 360 One ahead of its IPO. Other investors include Elpro International, Jasub Property Holdings, Gogri Family, PAM Family Trust, Shradha Family Trust, and Unmaj Ventures. (November 4, 2024)
Certus Capital, a real estate investment firm, invested c.$18 million in mid-market residential real estate projects developed by JSB Group and Dynamix Group in Mumbai. (November 4, 2024)
Aegis Vopak Terminals, the Indian JV arm of Royal Vopak, a Dutch independent tank storage company, raised c.$95 million led by 360 One, a wealth management company. (October 30, 2024)
TripFactory, a travel platform, raised c.$50 million in a Series A funding round led by family offices and HNIs including Vani Kola (Kalaari Capital) and Pai Family Office, at an estimated valuation of c.$500 million. The exact details of the transaction were not disclosed. (October 30, 2024)
Finova Capital, a non-bank lender, raised c.$135 million in its Series E funding round led by Avataar Venture Partners, Sofina, Norwest Venture Partners and Madison India Capital. (October 29, 2024)
Vridhi Home Finance, a housing finance company, raised c.$37 million in a Series B round led by Norwest Venture Partners and Elevation Capital. (October 29, 2024)
Zinc, an edu-wealth startup, raised c.$25 million in a seed funding round led by Nexus Venture Partners. Other investors include Quona Capital, EDBI, Global Ventures, and Saison Capital. (October 29, 2024)
[Expected] Multiples PE is looking to sell its majority stake in PeopleStrong, a human resource platform, at an estimated valuation of c.$180 million. (October 29, 2024)
Other Credit Deals and Issuances
SBI is looking to raise c.$1.2 billion through issuance of infrastructure bonds. (November 8, 2024)
Country Delight, an online milk and grocery delivery platform, raised c.$24 million in venture debt from Alteria Capital. (October 31, 2024)
Bharti Telecom raised c.$1.3 billion through issuance of NCDs at a coupon rate of 8-9% to refinance its existing high-cost debt. (October 31, 2024)
Tata Capital, a financial services arm of the Tata Group, is looking to raise c.$500 million through issuance of dollar-denominated bond. (October 29, 2024)
PNB Housing is looking to raise c.$125 million through issuance of ECBs. (October 29, 2024)
Adani Enterprises is looking to raise c.$240 million through issuance of NCDs. (October 29, 2024)
Arya.ag, an agri-commerce platform, secured c.$20 million commitment from the US DFC to guarantee a debt facility for its agri-commerce subsidiary, Aryatech. (October 28, 2024)
KEY FUNDS AND FUNDRAISES
Northern Arc Capital, a non-banking finance company, has secured a debt commitment of c.$50 million from US DFC and c.$15 million from OeEB, an Austrian development bank, for its maiden climate-focused fund. (November 7, 2024)
Inflexor Ventures, a technology-focused VC firm, marked the first close of its opportunities fund which has a target corpus of c.$42 million. (November 6, 2024)
MARKET INSIGHTS & RESEARCH
Reports
Grant Thornton’s ‘Guide to establishing presence in India’ highlights that India is a prime destination for foreign investment, with GDP growth projected at 6.5-7% for FY 2025. India recorded c.$66 billion in M&A and PE deals in 2023, with government schemes like the PLI attracting investments in key sectors. Major sectors expected to grow include tech, media, and financial services, signaling strong opportunities for global businesses looking to enter or expand in India.
SBI Caps report on ‘Energy storage systems’ emphasizes the growing need for storage systems like Battery Energy Storage Systems (BESS) and Pumped Storage Projects (PSP) to support grid stability as renewable energy sources expand. By FY32, India aims to increase its storage capacity creating a significant investment opportunity valued at c. INR 5 trillion in storage and battery technology ecosystems.
CBRE’s report ‘Exploring the intersection of education and real estate in India’ highlights that India's education sector, projected to reach $313 billion by FY2030, includes 1.5 million K-12 schools and c.59K higher education institutions. Significant investment, including $9.5 billion FDI since 2000, and planned spending growth to 6% of GDP, aim to support this sector’s expansion; 4+ billion sq. ft. of additional educational space needed by 2035.
KPMG’s report on ‘Automotive pulse – India’ outlines that India's auto sector is rapidly transforming, driven by tech, policies, and EV focus. In CY23, vehicle registrations reached a record 24 million, up by 11%+, while auto exports rose by 14% in H1 FY25. India can become a global auto production hub, with projected exports of $30 billion by 2026 and a target market size of $1 trillion by 2035.
CBRE’s ‘India mid-year market outlook 2024-25’ reports moderate inflation, resilient office and retail demand, and strong housing sales with projected new launches of up to 300K units. Office absorption is expected to reach ~70 million sq. ft., with significant GCC leasing, while equity investments in real estate are forecasted at $10-11 billion, driven by robust demand across diverse sectors.
KPMG’s report ‘Embodied carbon in India infrastructure’ highlights the critical need to address embodied carbon emissions in India's as India's construction sector continues to grow rapidly at 6.5% p.a., contributing significantly to global carbon emissions, thus requiring strategies to reduce up to 2 gigatons of emissions by focusing on low-carbon materials, policies, and technology.
PWC’s report on ‘Rebuilding trust with tamper-proof traceability in supply chains’ outlines that India's supply chain management market, valued at c.$3.4 billion in 2023, is projected to grow at an 11%+ CAGR, reaching c.$6.4 billion by 2030, driven by increased trade and sector expansion. Supply chains face challenges prompting companies to adopt transparency and regulatory compliance measures.
Grant Thornton’s report on ’Passenger vehicle (PV) market trends’ highlights key trends in India's PV market. While H1 FY25 saw muted growth with only a 0.5% increase in domestic sales, SUVs and UVs continue to dominate, comprising 65% of total sales. Consumer preferences are shifting towards premium and hybrid models.
Articles
Indian startups raised c.$1.2 billion across 119 deals in October, led by edtech, e-commerce, and NBFC sectors, despite a 25% m-o-m decline in funding. Growth-stage startups dominated, with 70% of the funding, notably Eruditus ($150mn) and Finova Capital ($135mn). Increasing investor confidence can further boost the startup ecosystem's momentum. Read more.
India's family office landscape is expanding rapidly, growing from 45 to 300 offices in six years, especially in non-metro industrial hubs like Surat and Ludhiana. Younger, often foreign-educated heirs are embracing family offices to diversify wealth through unconventional, high-return investments. This trend signals a shift from traditional assets to alternative asset classes. Read more.
Family office is the gateway to family business for these scions
The '2 and 20' VC fee model is being reconsidered in India, as funds like Artha Venture Fund, Blume, and Blacksoil adopt more flexible fee structures to better match investor expectations based on their specific stage and sector focus. Industry leaders advocate for fairer, value-based fee models that align with the tangible value added by fund managers. Read more.
A potential Trump presidency is viewed positively by the Indian startup ecosystem, which anticipates improved US-India business ties, increased fund flows, and possible benefits from tax cuts and anti-China policies. In 2021, low US interest rates drove Indian startup funding to a record $36 billion, though subsequent rate hikes reduced funding to $8.8 billion. Read more.
Indian mid-market firms are prioritizing sustainability, with 73% planning to increase ESG investments over the next year, surpassing the global average of 58%. Key focus areas include renewable energy, sustainable product development, and supply chain reforms, aligning with India’s 2070 net-zero goal. Read more.
Indian bonds are gaining traction globally due to market liberalization, such as the 2020 FAR designation allowing unrestricted foreign investment. With a vast government bond market of $1.3 trillion, low volatility (5%), and yields around 7%, Indian bonds offer strong liquidity, attractive income, diversification benefits, and reforms like the GST have strengthened fiscal stability, positioning Indian bonds as appealing for income-oriented investors. Read more.
KPIs
India's FMCG sector is seeing a strong rural boost, as rural markets are outpacing urban areas in consumption growth, particularly in volume driven by staples and contributions from small to mid-sized FMCG companies. Meanwhile, urban demand shows modest growth.
India's services sector saw a revival in October with the PMI at 58.5, fueled by strong demand and rising sales. The PMI climbed to 58.5 from a 10-month low, signaling robust growth in output, consumer demand, and employment.
Nomura reports that India's festive consumption growth has slowed to 15% this year, driven by subdued demand in major cities and industrial regions. Although demand remains steady in rural areas and smaller cities, festive sales were uneven.
India is encouraged to capitalize on its demographic advantage over the next 20 years by focusing on raising per-capita income. Goldman Sachs emphasizes the importance of creating 10 million new jobs each year, enhancing education, infra investment, and labour-heavy manufacturing to fuel growth and wealth creation.
WEEKLY MARKET UPDATE (w/c November 4, 2024)
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