A snapshot of PE/VC activity during July 2024.
According to the IVCA-EY monthly PE/VC roundup, PE/VC investments in July 2024 were 35% lower than June 2024 in value terms.
Investments
PE/VC investments in July 2024 (US$2.7 billion) were 42% lower than July 2023 (US$4.6 billion) and 35% lower than June 2024 (US$4.1 billion). In terms of the number of deals, July 2024 recorded 81 deals 19% increase compared to July 2023 (68 deals).
July 2024 recorded six large deals (deals valued US$100 million), aggregating US$1.5 billion, a 58% decline y-o-y in terms of value (US$3.6 billion across 10 deals in July 2023). The largest deal in July 2024 was Brookfield’s investment of US$550 million in Leap Green Energy.
Buyout investments had the largest share in July 2024, with US$1.2 billion invested across five deals compared to US$2.9 billion across six deals in July 2023, marking a decline of 58%. Start-up investments were the second largest, with US$729 million invested across 48 deals in July 2024, a growth of 31% compared to US$558 million across 40 deals in July 2023. Growth investments ranked third highest in July 2024 (US$518 million across 12 deals) with 55% growth compared to July 2023 (US$334 million across eight deals). This was followed by credit investments (US$196 million across nine deals), a 44% decline compared to July 2023 (US$352 million recorded across seven deals). Lastly, PIPE investments stood at US$33 million across seven deals compared to US$485 million across seven deals in July 2023, a decline of 93%.
From a sector perspective, infrastructure was the leading sector in July 2024, with US$690 million in PE/VC investments across six deals, followed by e-commerce (US$404 million) and healthcare (US$307 million). These sectors cumulatively accounted for 52% of total PE/VC investments in July 2024.
Spotlight: pure play buyouts
Over the last 4-5 years, the buyout investment strategy has gained significant momentum within the broader Indian PE/VC landscape. In recent years, we have seen a rise in buyouts, complemented by large deal sizes despite ongoing uncertainties and geopolitical tensions.
Buyout transactions have evolved from targeting small companies to encompassing large-cap deals. Some of these transactions involved taking control of long-standing businesses with strong growth potential.
Taking the last five-year’s view (since 2019), buyouts have ranked third among investment strategies for PE/VC investors, following start-up and growth investments. They have recorded a cumulative value of US$44.3 billion across 165 deals, accounting for 20% of overall PE/VC investments in the pure play class. Compared to buyouts in real estate and infrastructure asset classes, pure play buyouts were higher by 13% in value terms. (US$39.3 billion across 147 deals).
After reaching an all-time high of US$17.1 billion, buyouts experienced a 78% year-on-year decline in 2022. However, they rebounded in 2023, registering an impressive 98% growth to reach US$7.4 billion, compared to US$3.8 billion in 2022. Buyouts in 2024 (till July) have already accounted for 80% of the buyout investments in the previous year (US$5.9 billion).
In the pure play asset class, buyouts have accounted for 20%, 12%, 26%, 9%, 23% and 29% of the overall pure play PE/VC investments each year since 2019 to 7M2024. This growing trend highlights the preference of PE/VC investors for buyouts as an investment strategy. Key PE funds involved in buyout deals include Blackstone, Advent, BPEA EQT, Warburg, CVC, TPG, PAG and KKR.
From a sector perspective, the technology sector led both in terms of value and volume (US$18.5 billion across 31 deals). Financial services followed with buyouts totaling US$7 billion. Pharmaceuticals ranked third with buyouts totaling US$5.6 billion. These sectors accounted for 70% of the overall buyouts since 2019. Other sectors that followed were healthcare (US$4 billion), industrial products (US$3.7 billion), and retail and consumer products (US$1.5 billion).
Overall, the buyouts trend in India reflects the increasing maturity of the PE/VC market and the growing confidence of investors in their ability to identify and unlock value in not only the established businesses but also in high potential early-stage companies.
Exits
July 2024 recorded 16 exits worth US$2.5 billion, compared to US$3 billion in July 2023 across 20 deals.
Strategic exits were the highest in July 2024 at US$1.6 billion across four deals, followed by open market exits at US$582 million.
The largest exit in July 2024 was Advent’s sale of its 100% stake in Bharat Serums and Vaccines for US$1.6 billion.
Fundraise
July 2024 recorded a total fundraise of US$434 million, across six funds, compared to US$437 million raised in June 2024 and US$240 million in July 2023.
US$140 million raised by Welspun One Logistics Parks was the largest fundraise in July 2024.
