India In Sight #75
Weekly updates on Indian private markets.
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Key reports in this edition:
India Insurtech landscape and trends by BCG and India Insurtech Association
Opportunities in the drone sector by PWC and Assocham
India AgriFoodTech by Ag Funder
The first cheque report 2024 by Jungle Ventures
The biggest proxy to transformers by Global Consilient Research
KEY DEALS
Equity
Zepto, an online grocery delivery and quick commerce app, raised c.$350 million in a funding round led by Motilal Oswal, taking the total funds raised to c.$1.4 billion in a year. Other investors include domestic HNIs and family offices. (November 22, 2024)
360 One Asset, a domestic fund backed by Bain, invested c.$25-$30 million for a minority stake in OneSource Specialty Pharma, a TPG-backed CDMO specializing in biologics, injectables, and drug-device combinations, in a secondary transaction. The exact financial details were not disclosed. (November 21, 2024)
Zopper, an insurtech platform, raised c.$25 million in a Series D funding round led by Elevation Capital. Other investor include Dharana Capital and Blume Ventures. (November 21, 2024)
HealthKart, an omnichannel nutrition platform, raised c.$150 million led by ChrysCapital and Motilal Oswal Alternates. Existing investors include A91 Partners and Neo Group. (November 18, 2024)
Alpha Wave Global, a US based PE firm, to acquire c.12.5% stake in Advanta Enterprises, a hybrid seeds company, for c.$350 million, in a mix of primary ($100 million) and secondary transaction ($250 million). (November 20, 2024)
Other Credit Deals and Issuances
Vedanta Resources is looking to raise c.$1.2 billion via bonds to refinance its $606 million of outstanding c.14% debt at a coupon rate of c.10%. (November 21, 2024)
Bank of Baroda and Axis Bank are looking to raise c.$420 million (Tier 2) and c.$360 million (Tier 1) respectively, through issuance of bonds. (November 21, 2024)
State Bank of India raised c.$500 million through issuance of senior unsecured fixed-rate notes at a coupon rate of c.5%. (November 19, 2024)
KEY FUNDS AND FUNDRAISES
Bain Capital raised c.$9 billion for its latest Global Special Situations Fund. Bain Capital has invested significantly in India through its previous special situations fund. (November 19, 2024)
Ortella Global Capital, a venture capital fund launched by Sayan Ghosh (ex-IFC), launched its maiden fund with a target corpus of c.$35 million to invest in start-ups across growth phases. (November 19, 2024)
Alpha Alternatives, a multi-asset manager, marked the first close of its maiden infrastructure fund at $450 million. The fund has a target corpus of c.$500 million and an additional $250 million as green shoe option. (November 18, 2024)
MARKET INSIGHTS & RESEARCH
Reports
BCG and India Insurtech Association’s report on ‘India Insurtech landscape and trends’ highlights that the sector has raised over $2.5 billion in funding, with 150+ insurtechs driving c.$750 million revenue, with 10 Unicorns/Soonicorns and 45+ Minicorns. Despite robust growth in health insurance and accessibility, India still faces low penetration, with 45%+ medical expenses out-of-pocket.
PWC and Assocham’s report shares ‘Opportunities in the drone sector’ that are driven by advancements in tech and AI. The global market, is growing at 15% p.a., with contributions from infra (36%), agriculture (25%), and transport (10%). India, aiming to become a global drone hub by 2030, expects drones to boost GDP by 1-1.5%, driven by reforms like the Drone Rules 2021, PLI schemes etc.
Ag Funder’s report on ‘India AgriFoodTech’ highlights that agrifoodtech startups raised $940 million (down 60% vs 2022) across 129 deals in 2023 (vs 133 deals in 2022). Key categories included eGrocery ($420M, -46% YoY) and Agribusiness Marketplaces & Fintech ($162M, -62% YoY), together accounting for 62% of total funding. This reflects a global trend of smaller deal sizes, down rounds, and valuation resets.
Jungle Ventures’ ‘The first cheque report 2024’ analyzes the startup ecosystem across India and Southeast Asia (SEA) including 9K founders and $8.8 billion in seed funding. Second-time founders raised significantly larger rounds, with median sizes 145% higher in India and 73% higher in SEA. While seed funding has stabilized at $1.5 billion/year, fintech and retail continue to dominate funding.
Global Consilient Research’s report on ‘The biggest proxy to transformers’ underpins that the global power transformer market is projected to grow from $20.7 billion in 2023 to $37.5 billion by 2032 at 6.7% CAGR. In India, the market is expected to double from $3.9 billion in 2023 to $8.4 billion by 2030 at 11% CAGR, fueled by rapid urbanization, industrialization, and renewable energy integration.
Goldman Sachs’s report on ‘India outlook 2025’ forecasts GDP growth at 6.3% in CY2025, driven by structural strengths. Inflation is expected to decline to 4.2%, with food inflation at 4.6% due to improved crop production. India's CAD is projected to remain contained at 1.3%, supported by resilient services exports and strong FX reserves of c.$680 billion. RBI could cut rates by 50 bps in early 2025.
HSBC Global’s report ‘India: 100 indicators of growth’ highlights a 10% improvement in agri indicators with strong government spending boosting investment growth. Rural and urban consumption weakened sharply, with only 30-35% of indicators showing growth. Exports remain resilient, led by services, contributing 23% to GDP, while trade and transport sectors lag.
Articles
India's real estate equity investment is projected to surpass $10 billion in 2024, up from $7.4 billion last year, driven by a 46% rise in leasing activity between January and September. Key factors include growing demand from global corporations setting up global capability centers (37-40% of office leasing), IT/ITeS, flex spaces, and the engineering and manufacturing sectors. Read more.
India’s Finance Minister highlighted quick commerce as a unique Indian innovation with the potential to enhance India's global reputation for innovative solutions. India encourages startups in this segment to expand their solutions internationally. Read more. [Paywall]
Indian investors are seeking homegrown GenAI startups to provide niche, sector-specific solutions amid global dominance in horizontal infrastructure. According to Inc42, 70% of GenAI startups in India target enterprise clients, while 30% focus on consumers and individual creators. Read more. [Paywall]
KPIs
India's business activity surged to a three-month high in November, with the HSBC Flash India Composite PMI reaching 59.5. The growth was fueled by stronger business gains and export sales, with both manufacturing and services sectors expanding. However, rising cost pressures prompted businesses to increase selling prices.
RBI's latest bulletin indicates that the economic slowdown in Q2 FY2024-25 has eased, driven by a boost in domestic demand from private consumption, particularly festival spending in Q3. However, the RBI highlighted challenges like rising protectionism and fragile global confidence despite overall economic resilience.
India is poised to drive global workforce growth, contributing 20% of it between 2023 and 2050. In contrast, China is projected to see a decline in its workforce during the same period.
RBI injected c.$3 billion through a variable rate repo auction to mitigate the impact of recent foreign outflows from local debt and equity markets on banks' funding costs, analysts said. This marks the second such auction since the RBI shifted its stance to neutral from withdrawal of accommodation.
Below is a quick snapshot of the services sector performance from the latest RBI bulletin November 2024
WEEKLY MARKET UPDATE (w/c November 18, 2024)
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