India In Sight #80
Weekly updates on Indian private markets.
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Key reports in this edition:
Code to credit: A thesis on digital lending in India by Eximius Ventures
India Alpha - Decoding Digital India by Kalaari Capital
Startup IPOs 2024 by Entrackr
India’s Cement sector in 2024 by Ikigai Asset Manager
India data centre market 2024 by CBRE
KEY DEALS
Equity
EQT and Temasek sold their stake in O2 Power, a renewable energy platform, for an enterprise value of c.$1.5 billion to JSW Neo Energy, the renewable energy arm of the Jindal (JSW) Group. (December 27, 2024)
Captain Fresh, an online meat and seafood startup, raised c.$12 million from Motilal Oswal Wealth. (December 27, 2024)
Shiprocket, a logistics and supply chain enabler, is raising c.$26 million in an extension of its ongoing Series E funding round led by KDT Ventures. Other investors include MUFG Bank, Tribe Capital, and SAI Global. (December 27, 2024)
Leap India, a logistics solution startup, raised c.$63 million in its latest funding round led by KKR. Other investors include Sixth Sense, FirstBridge India, and Madhurima International. (December 26, 2024)
EPACK Prefab, a pre-engineered building and turnkey solution provider company, raised c.$20 million in its first funding round from GEF Capital Partners. (December 23, 2024)
Cornerstone Ventures, a SaaS-focused venture capital firm, exited its investment in Intelligence Node, a retail analytics and AI platform. The company was acquired by Interpublic Group, an advertising company, for c.$100 million. (December 23, 2024)
QuiD Cash, a supply chain fintech startup, raised c.$4.5 million in its pre-Series A round from a consortium of angel investors and existing investor MINTCAP. (December 19, 2024)
Seekho, a learning-focused OTT platform, raised c.$8 million in its Series A round, led by Lightspeed and Elevation Capital. (December 17, 2024)
[Expected] Waterfield Advisors, a wealth management platform, is looking to raise $10-15 million at a valuation of $80-100 million from family offices and HNIs. (December 24, 2024)
MARKET INSIGHTS & RESEARCH
Reports
Eximius Ventures’ report ‘Code to credit: A thesis on digital lending in India’ addresses India's significant credit gap, projected at $1 trillion by 2027. Digital lending is projected to grow to $400 billion by 2024 end, contributing 55% of India's FinTech market. 500 million new-to-credit individuals and MSMEs remain underserved, highlighting immense potential for digital platforms. Key drivers include the advancement of India Stack, policy push and a youthful, tech-savvy demographic.
Kalaari Capital’s report ‘Decoding Digital India’ outlines that India's digital economy is projected to reach $1T by 2026, driven by the rapid adoption of digital payments ($5T in transaction value in 2023), growing e-commerce and internet usage (700M active internet users). Key sectors like FinTech, EdTech, and HealthTech are flourishing, with 90+ unicorns and $14B in VC investments in 2024.
Entrackr’s report on ‘Startup IPOs 2024’ highlights that in 2024, 13 Indian startups launched IPOs, vs 6 IPOs in 2023 and 2022, collectively raising c.$3.5 billion. Key IPOs included Swiggy ($1.3B), Ola Electric ($735M), and FirstCry ($735M). Unicommerce saw high subscription at 170x, while TAC Security delivered the highest listing gains at c.175%. Further, 50 startups are expected to launch their IPOs in 2025.
Ikigai Asset Manager’s report highlights ‘India’s Cement sector in 2024’ that showcased robust demand driven by infrastructure and housing projects. India is the 2nd largest cement market globally with an installed capacity of 659 MT. The top five players have 50%+ market share, reflecting significant consolidation. Renewable energy integration could lower costs, but profitability remains constrained, with EBITDA/ton hovering in a narrow range, and most players operating at sub-optimal ROCEs.
CBRE report on ‘India data centre market’ underscores the rapid growth in 2024, reaching 1,255 MW (~19 million sq. ft.) capacity. Investments in the sector neared $60 billion (2019-2024), and are expected to exceed $100 billion by 2027. AI demand is driving growth, with India’s GenAI sector growing at 28% CAGR through 2030. Occupancy levels remained strong at 75-80%, with BFSI and tech firms as key drivers.
Articles
The Union government and the Asian Development Bank (ADB) signed a $500M loan to support green and sustainable infrastructure projects aligned with India's climate goals. The funding will prioritize connectivity, energy transition, urban projects, education, and healthcare, providing long-term capital for under-resourced sectors. Read more.
In 2024, seed funding in India dropped by 25%, while overall startup funding rose 6% to $11.3B, as per Tracxn's report. Venture capitalists prioritized pre-IPO and late-stage investments, reflecting a shift toward lower-risk opportunities driven by better liquidity and returns. Read more.
Startups in India raised $1.2B in December 2024, reflecting a 22% YoY decline. Key funding rounds included Mumbai-based Rebel Foods securing $210M and Mintifi raising $180M. Other notable fundraises featured Vastu Finance with $100M and Zetwerk with $70M, underscoring continued interest in specific sectors despite the overall dip in funding. Read more.
India witnessed a remarkable c.45% increase in VC funding during the first ten months of 2024, reaffirming its position as one of the top five global markets for VC activity. It is one of the few markets where both deal value and volume expanded, reflecting growing investor confidence. However, raising funds remains challenging, despite the revived funding activity. [Paywall] Read more.
India's clean energy sector reached a milestone in 2024, with total renewable energy capacity surpassing 200 GW, contributing 45% of the country’s total power generation capacity. India’s non-fossil power capacity included 94 GW solar, 48 GW wind, and 47 GW large hydropower. Renewable capacity addition nearly doubled to 24 GW in 2024. Read more.
Late-stage growth equity funding showed signs of recovery in 2024 after two years of decline and is expected to rise further in 2025, with funding rounds likely to include significant secondary components as early investors seek partial exits ahead of IPOs. Valuations are anticipated to remain rational as more VC-backed tech companies prepare to go public in 2025. [Paywall] Read more.
RBI allowed full-KYC Prepaid Payment Instrument (PPI) holders to make UPI transactions via third-party apps, enhancing interoperability and user convenience in digital payments. Previously restricted to PPI issuer apps, this change aims to boost digital payment adoption, especially for small-value transactions, driving digital wallet adoption and UPI payments. Read more.
The government is planning an amendment in the Income Tax Act in Budget 2025, aimed at simplifying the tax regime for foreign semiconductor firms and boosting semiconductor manufacturing in India. This scheme would allow foreign firms to calculate income as a percentage of turnover, applying the 35% corporate income tax rate to the fixed percentage. Read more.
India’s entrepreneurial and industrial ecosystem witnessed a transformative 2024, with $9.2B raised across 984 deals and 20 successful IPOs, showcasing its ability to attract global investments and strong exits. Major global players like Airbus, Apple, Samsung, and Foxconn solidified India’s position as a reliable manufacturing hub with significant investments. Read more.
India's fixed income market in 2024 marked the inclusion in the JPMorgan Global Bond Index and stable returns amidst global volatility. The market was valued at $2.7T by September. Progressive reforms like SEBI’s move to lower bond face values to Rs 10,000 democratized access for retail investors. Further inclusion in Bloomberg and FTSE Russell indices is expected in 2025. Read more.
Family offices are increasingly becoming the custodians of substantial global wealth, focus on preserving assets during intergenerational transitions. Shaped by emerging ESG and philanthropic priorities, they increasingly adopt technology and alternative investments, fostering stability in private markets. Read more.
In 2024, India's mobility sector saw transformative policy actions aimed at advancing electric vehicle (EV) adoption. The FAME-II scheme concluded on March 31, 2024, marking a significant milestone. Simultaneously, new policies were introduced to bolster battery-driven vehicles, reflecting a strong push toward sustainable transportation. Read more.
India's technology regulation saw limited progress in 2024, with key legislation like the DPDP Act and Telecom Act still awaiting notification, despite being enacted in 2023. Government is set to prioritize AI infrastructure and electronics manufacturing in 2025, while Starlink's entry into the telecom market marks a significant development. [Paywall] Read more.
KPIs
India's current account deficit stood at $11.2B (1.2% of GDP), during July-September, maintaining a similar level to the previous year. The merchandise trade deficit widened to $75.3B, while net services receipts increased to $44.5B. Private transfer receipts also grew, contributing to a balance of payments surplus of $18.6B.
The consumption gap between rural and urban India narrowed in 2023-24, driven by significant increases in monthly per capita consumption expenditure. Expenditure remained predominantly on non-food items, while rural growth was bolstered by government initiatives and social welfare programs that influenced overall consumption trends.
WEEKLY MARKET UPDATE (w/c December 23, 2024)
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