PE/VC bets grow 5 pc to $56 bn in 2024, current year to be challenging: Report

Mumbai, Investments by the private equity and venture capital industry grew 5 per cent to USD 56 billion in 2024, after declining for two consecutive years, a report said on Wednesday. The ongoing calender year is going to be a “challenging” one with many uncertainties expected to unfold, the report by industry lobby grouping IVCA and consultancy firm EY said. “The yet to be unveiled policies of the new US govt could have far reaching effect on international trade flows, exports, currency, crude oil prices and their cumulative impact will have a bearing on the Indian macro,” the consultancy firm’s partner Vivek Soni said.

He said Indian consumption also appears to be slowing down, and it hopes government takes steps to address the same. The firm is “cautiously optimistic” and hopes for the ongoing corrections in markets to close the valuation gap which can help in deal closures.

In the year gone by, PE and VC funds’ deal volumes surged 54 per cent to 1,352 transactions, indicating a decline in the average value when compared to the previous year.

Soni attributed the surge in deal activity to a 254 per cent increase in the credit deals at 310 transactions, through which USD 10.8 billion were invested.

There was a marginal 3 per cent fall in infrastructure and real estate investments at USD 20.9 billion from USD 21.5 billion in 2023, but the same was offset by investments in the pure-play PE, which grew by 10 per cent to reach USD 35 billion from USD 31.9 billion in the previous year, the report said. The year saw four deals of over USD 1 billion aggregating to USD 6.1 billion compared to six deals worth USD 9.6 billion in the year-ago period, the report said, adding that ATC India Tower Corporation’s acquisition by Brookfield-sponsored infrastructure investment trust Data Infrastructure Trust for USD 2 billion was the largest deal. From an exit perspective, there were 282 deals worth USD 26.7 billion in 2024, higher than the USD 24.9 billion in 2023, the report said, attributing the same to the tailwinds provided by capital markets.

There was a 34 per cent decline in new fundraises at USD 10.4 billion across 34 funds in 2024, as against 95 fundings that raised USD 15.9 billion in the year-ago period.