India In Sight #84
Weekly updates on Indian private markets. Featuring Annual Dealtracker 2024 report by Grant Thornton
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Key reports in this edition:
Annual Dealtracker 2024 by Grant Thornton
India’s digital dividend by KPMG
Impact of investments in railway infrastructure by PWC and FICCI
Corporate hospitals thematic report by Emkay
Renewable energy and industrial metals thematic report by Axis Securities
Beverage investments sector note by Invest India
KEY DEALS
Equity
Wingify, a provider of marketing technology and SaaS product, sold a majority stake to Everstone Capital for an estimated c.$200 million. The exact financial details were not disclosed. (January 24, 2025)
Blackstone and its JV partner Panchshil Realty to invest c.$6 billion in Maharashtra to develop data centres in the state. (January 24, 2025)
Infra.Market, an online B2B marketplace for construction materials, raised c.$120 million in a pre IPO funding round from Tiger Global, Evolvence, Foundamental, Zerodha, and Capri Global at an estimated valuation of c.$2.8 billion. (January 23, 2025)
Ati Motors, an industrial robotics startup, raised c.$20 million in a Series B funding round led by Walden Catalyst Ventures and NGP Capital. Other investors includes True Ventures, Exfinity Venture Partners, Athera Venture Partners, and Blume Ventures also invested in the round. (January 23, 2025)
Aris Infra Solutions, a tech-driven construction material provider, secured c.$10 million in a pre-IPO funding round from Cognizant Capital, JVS Holdings, and Lamha Enterprise. (January 23, 2025)
[Expected] Spinny, a used car platform, is looking to raise c.$100 million in a new funding round, mostly from existing investors that include Elevation Capital, Abu Dhabi Growth Fund, General Catalyst and Accel. (January 23, 2025)
Credit
Namdev Finvest, a non-banking finance entity, raised c.$38 million in debt funding from DWM, BlueOrchard and Mirova to diversify its operations. (January 24, 2025)
Arya, an agritech startup, secured c.$30 million in debt financing from HSBC India to provide post-harvest liquidity to farmers. (January 23, 2025)
KEY FUNDS AND FUNDRAISES
Kotak Alternate Asset Managers, an alternative investment manager, marked the first close of its third healthcare and life sciences focused PE fund at c.$30 million. The fund has a target corpus of c.$200 million. (January 23, 2025)
IIFL Fintech Fund, the early stage investment arm of IIFL Group, marked the final close of its second fund at c.$23 million. (January 23, 2025)
MARKET INSIGHTS & RESEARCH
Reports
Grant Thornton’s ‘Annual Dealtracker 2024’ unpacks India's deal landscape in 2024 that saw 2,180+ deals valued at $116B, (volume up by 33% and value up by 76% vs 2023). M&A activity hit a record high with 683 deals totaling $44B. Private equity saw ~1,300 deals valued at $31B. IPO and QIP activity also set records, raising $21B and $20B, respectively, highlighting robust investor confidence.
KPMG’s report on ‘India’s digital dividend’ outlines initiatives like Aadhaar, Digital India, and BharatNet to be the key drivers. UPI processed $1.6B transactions, while the Skill India mission trained 400M citizens. With $1.2B invested in the IndiaAI mission, India is fostering AI innovation, enhancing governance, and promoting inclusivity to bridge the digital divide.
PWC and FICCI’s report on ‘Impact of investments in railway infrastructure’ highlights that India is enhancing its railway infrastructure through significant investments (~$30B capex in 2023-24) and the National Rail Plan (NRP). Initiatives include doubling network capacity, building dedicated freight corridors, and upgrading rolling stock and terminals.
Emkay’s thematic report on ‘Corporate hospitals’ underscores that India's corporate hospitals plan a 32% expansion in bed capacity by FY27. Increased insurance penetration (41%), medical tourism growth, and improved affordability are key drivers. Large hospitals are focusing on brownfield expansions (60% of new capacity). The revenue per bed grew at a 14% CAGR from FY19 to FY24.
Axis Securities’ report on ‘Renewable energy and industrial metals’ outlines that India targets to increase total power capacity to 900 GW by FY32, with 596 GW from renewables. Solar requires 267 GW of additional capacity from the current 98 GW. In 2024, India added a record 24.5 GW of solar capacity (2x YoY). Risks include overcapacity and dependence on imports for upstream components.
Invest India’ note on ‘Beverage investments’ outlines rapid growth in India's beverage industry ($50B in 2023; expected to reach $64B by 2028), driven by rising demand, a young population, and expanding middle class. With a robust agri base, traditional spirits gaining global acclaim, and increasing investments from major players, the industry is poised for growth, innovation and sustainability.
PWC’s ‘28th Annual Global CEO Survey: India perspective’ highlights that in 2024, AI boosted productivity by over 50% and drove revenue growth, with Indian CEOs aggressively integrating AI across business processes. 87% of Indian CEOs are confident in the country’s growth and aim of $1T in exports by 2030, as AI and infrastructure investments drive progress toward a "Viksit Bharat" vision by 2047.
Union Budget 2025 - Expectations
Fintech firms in India have proposed c.$120 million dedicated fund to the finance ministry ahead of Budget 2025, amidst rising capital costs and a funding freeze. The fund aims to provide subsidized capital for small- and mid-sized fintechs. Read more.
Startups and VCs have called for the rationalization of ESOP taxation to eliminate double taxation in the upcoming Union Budget. Currently, employees pay income tax when exercising ESOPs and capital gains tax upon selling shares. The industry suggests removing tax at the exercise stage to make ESOPs more attractive. Read more.
India's DeepTech ecosystem is poised for high growth, with over 3,600 startups and 480 new additions in 2023, doubling from 2022. Challenges like limited funding (70% face low median ticket sizes), long gestation periods, and talent shortages persist. Budget 2025 is expected to address these gaps by fostering public-private synergies, boosting R&D investments, providing tax incentives, modernizing infrastructure, and strengthening IP frameworks. Read more.
India’s agriculture sector seeks targeted interventions to address post-harvest losses (20% of annual output), inadequate infrastructure, and climate challenges. Key demands include investments in cold chains, rural connectivity, agritech innovations like drones (cutting input costs by 20-30%), and enhanced credit access through data-driven solutions. Read more.
Taxpayers expect personal tax reforms, such as higher income tax rebates and allowances under the new tax regime, to boost disposable incomes and ease financial pressures. Simplifying tax laws, addressing high rental costs, and easing compliance burdens, including TDS provisions, are key expectations. Read more.
Articles
Online food delivery platforms like Zomato and Swiggy face stiff competition as many restaurants are exploring ONDC, which offers lower commissions, as an alternative delivery platform. [Paywall] Read more.
The D2C market is driven by key demographics, with 74% of Gen Z and 62% of millennials purchasing from D2C brands. This growth is further supported by India’s rapidly maturing e-payment ecosystem, propelled by the adoption of digital payment solutions and the transformative rise of e-commerce. Read more.
KPIs
Bank lending has grown faster than deposits in early Q4, increasing pressure on resources and driving up deposit rates. As of January 2025, lending has risen 11.5% YoY, though growth has slowed due to RBI measures and market concerns.
India's private sector business activity fell sharply in January, hitting a 14-month low of 57.9. This slowdown is attributed to weaker performance in the service sector, despite strong manufacturing growth.
Retail inflation for agricultural and rural workers in India eased in December 2024 to 5.01% and 5.05% respectively, down from November figures.
WEEKLY MARKET UPDATE (w/c January 20, 2025)
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