In 2023, the investment landscape for Private Equity - Venture Capital (PE-VC) firms in India experienced a notable downturn, witnessing a 38% decline to less than $30 billion, according to data from Venture Intelligence. The year saw PE-VC firms injecting $29.7 billion into Indian companies across 756 deals, a significant drop from the $47.6 billion invested in 1,362 deals in the preceding year.
Breaking down the investment scenario, 2023 recorded 67 mega deals (involving rounds of $100 million or more), totaling $21.2 billion, contrasting with 112 such investments amounting to $31.8 billion in 2022.
The largest PE-VC investment in 2023 was the $2.4 billion infusion into Manipal Hospitals by Temasek and TPG Capital, which resulted in majority control for the investors. Following closely were significant transactions like the $1.35 billion buyout of HDFC Credila, a company specializing in education loans, by Baring Asia and ChrysCapital, and a $1 billion investment by Qatar Investment Authority (QIA) in Reliance Retail.
Remarkably, the creation of Unicorn companies (VC-funded startups valued at $1 billion or more) was subdued in 2023, with only two emerging during the year. Zepto, a quick-commerce startup, secured a place on the unicorn list with a $231 million investment led by foreign investors in August 2023. Towards the end of the year, Incred Finance, a consumer and small business loans firm, joined the ranks with a $60 million investment from domestic Family Offices and HNIs.
Arun Natarajan, Founder of Venture Intelligence, observed a shift in the investment focus of large-ticket PE investors towards sectors such as Healthcare, Financial Services, and Infrastructure. Additionally, the slowdown in Growth- and Late-Stage investing extended to the Venture Capital segment in 2023. However, a resurgence of optimism in private markets, buoyed by robust public markets, translated into a few notable growth-stage tech investments towards the close of the year.
(With Agency Inputs)
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