India In Sight #76
Weekly updates on Indian private markets.
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Key reports in this edition:
Deals at glance: Q3 CY24 by PWC
Winning in Indian healthcare by BCG and OPPI
India chemical sector report by Axis Capital
India single-specialty healthcare sector note by Avendus
India defense sector report by JP Morgan
NBFC and fintech sector report by Phillip Capital
Disciplined category - A rarity in retail by Nuvama Wealth
KEY DEALS
Equity
Candytoy Corporate, a manufacturers of promotional toys and confectionery items, raised c.$13 million in its Series A funding round led by Abakkus Asset Managers, at a post-money valuation of c.$100 million. Other investors include domestic HNIs, angel investors and institutional investors. (November 27, 2024)
ShopDeck, a D2C ecommerce enabler, raised c.$8 million in funding round led by Bessemer Venture Partners, with participation from Elevation Capital, Venture Highway, and Chiratae Ventures.
OneCard, a mobile-first credit card startup, raised c.$29 million in a bridge funding round, from Better Tomorrow Ventures, Peak XV, and Z47 (f.k.a Matrix Partners). (November 26, 2024)
[Exit] Edelweiss Financial Services, an investment and financial services company, exited its debt investment in Paradigm Realty, a real estate developer, and recovered c.$22 million in 2 years, generating c.19% returns. (November 27, 2024)
[Expected] Incuspaze, a coworking space startup, is looking to raise c.$25 million in its pre-IPO funding round. (November 29, 2024)
[Expected] Verlinvest, a consumer investment company. is looking to acquire c.20% stake in Eye Foundation, an eye hospital in South India for c.$100 million. (November 27, 2024)
Other Credit Deals and Issuances
Bank of Baroda raised c.$420 million through issuance of Tier-2 bonds at a coupon rate of 7.4%. (November 28, 2024)
Vedanta Resources raised c.$800 million from global investors through issuance of bonds. The proceeds will be used to prepay the company's outstanding debt due in 2028. (November 26, 2024)
NeoGrowth, an MSME-focused digital lender, raised a debt funding of c.$5 million from UTI International Wealth Creator, a debt fund managed by UTI AMC. (November 26, 2024)
KEY FUNDS AND FUNDRAISES
Stellaris Venture Partners, an early-stage, technology-focused, sector-agnostic investment firm, marked the final close of its third fund with a target corpus of c.$300 million. (November 28, 2024)
Kenro Capital, a VC fund launched by Piyush Gupta (ex-PeakXV), launched its debut fund to invest $20M to $30M per company in secondary opportunities. (November 28, 2024)
LeapFrog Investments, a Temasek-backed PE firm, marked the final close of its fourth fund at over $1 billion. (November 26, 2024)
IIT Bombay’s Society for Innovation & Entrepreneurship (SINE), one of the country’s oldest institutional incubators, to launch a c.$10+ million (Rs 100 crore) VC fund aimed at supporting deep tech startups. (November 22, 2024)
Razorpay, a payments and banking platform, launched the Razorpay Venture Investment Program, in collaboration with Peak XV Partners and Lightspeed. The program aims to identify and invest up to $1 million per startup, targeting early-stage ventures. (November 13, 2024)
Zeropearl, a micro-VC firm launched by Bipin Shah (ex-Titan Capital), launched its debut fund with plans to focus on 12-15 early-stage investments each year in consumer (D2C/B2C) and SaaS/GenAI sectors. The fund size was not disclosed. (November 1, 2024)
MARKET INSIGHTS & RESEARCH
Reports
PWC’s report ‘Deals at glance: Q3 CY24’ highlights a dynamic deal-making environment with 561 transactions valued at c.$20 billion. M&A activity surged by 57.5% YoY to 252 deals. PE activity declined to c.$7 billion. Notable sectors include telecom and pharma with c.$2.5 billion across 21 deals. The IPO market saw significant growth, with a 54% rise in Q3 IPO volumes.
BCG and OPPI report ‘Winning in Indian healthcare’ projects the Indian pharma market to be a c.$120 billion market by 2030. India's healthcare sector is undergoing transformative reforms driven by economic growth and rising demand for quality care. Global pharma companies play a key role with innovative tech and investments.
Avendus’ note on ‘India's single-specialty healthcare segment’ emphasizes that the sector is growing rapidly, driven by organized providers, scalable business models, and strong unit economics. IVF, dialysis, and eyecare benefit from minimal competition, advanced tech, and robust expansion strategies. The sector has attractive margins and significant investment potential.
Axis Capital’s report on ‘India chemicals’ outlines that India's chemicals sector is poised for rapid growth, with specialty chemicals expected to achieve a 15-20% CAGR (CY22-30) as global supply chains diversify away from China. Indian companies are leveraging disciplined capex (~3x increase over a decade) and R&D to capture market share, benefiting from China's pricing and underutilized capacities.
JP Morgan’s report on ‘India’s Defense sector’ notes that India's defense sector is on a structural growth path, with c.$150 billion projected in defense capex over the next 5 years (vs $85 billion in the last 5 years). The sector has seen 12% CAGR in revenue, 13% in EBITDA, and 24% in PAT between FY20-FY24. Exports are growing at a 46% CAGR.
Phillip Capital’s report on ‘NBFC and Fintech Sector’ highlights that the sector is navigating increased reliance on credit, with 54% individuals reporting a rise in expenses. Small-ticket loans dominate, growing to 91% of total debt from 88% in FY22, while credit card issuance is expected to double by FY30 (co-branded cards growing at 55% CAGR). Gen Z and Millennials drive credit demand, but high delinquencies in personal loans and over-leverage remain challenges.
Nuvama’s report ‘Disciplined category - A rarity in retail’ highlights the rapid growth potential in India's consumer durables market, projected to reach c.$36 billion by FY29 at 11% CAGR. The sector benefits from low penetration of products like air conditioners (17%) and washing machines (21%), driven by rising affluence, electrification, and shorter replacement cycles.
Deloitte’s ‘2024 CxO Sustainability Report’ reveals growing momentum in corporate climate action, with 85% of executives increasing sustainability investments and 70% anticipating significant impacts on their strategies. Companies are integrating sustainability into core strategies, recognizing it as a driver of innovation, new business models, and value creation.
Articles
India's GenAI ecosystem, though nascent, is projected to reach $17 billion by 2030 but faces challenges in competing with global leaders like the US ($34 billion) and China ($31 billion). To bridge the talent gap and strengthen its position, efforts are being made to align tech education with evolving AI tech. Read more. [Paywall]
Mizuho Financial Group, Japan's third-largest bank, is planning to enter India's PE/VC market next year. The move aims to engage with prominent dealmakers and provide services such as debt financing and wealth management, aligning with strategies adopted by other leading global and domestic banks. Read more.
India is striving to become the world’s most efficient and trusted trade hub by expanding its network of authorized economic operators (AEOs), integrating free trade zones, and adopting forward-thinking policies. 17 out of 20 major ports are fully automated with a focus on providing online services at all ports. Read more.
Experts emphasized the long-term necessity for India to develop its own large language model (LLM) and supporting infra, from semiconductors to foundational AI models. Other views advocate leveraging existing LLMs rather than building new ones. Read more.
KPIs
India's fiscal deficit reached 46.5% of the annual target in the first seven months of 2024-25, up from 45% last year. While revenue expenditure has risen, tax revenue growth remains muted. Despite a projected dip in capital spending, it is expected that the fiscal gap can be contained within the 4.9% of GDP target.
The government plans to update the GDP computation base year to 2022-23 from 2011-12 by February 2026, marking the first revision in over a decade. This change aims to provide a more accurate economic representation by incorporating new sectors and evolving consumption patterns.
India's economy is expected to rebound, with GDP growth projected at 6.7% and 6.8% in the upcoming FY25 quarters. Key growth drivers include increased government spending, easing food inflation, and a recovering job market, countering setbacks from weather disruptions and subdued consumer spending.
WEEKLY MARKET UPDATE (w/c November 25, 2024)
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