(MENAFN- KNN India) New Delhi, May 9 (KNN) India's private equity and venture capital deal activity is likely to remain subdued in 2024 compared to the record levels seen in 2021 and early 2022, according to a new report by Bain & Company and the Indian Venture Capital Association (IVCA).
The report, titled "India Private Equity Report 2024," cites global macroeconomic factors like sluggish GDP growth, elevated interest rates, and geopolitical tensions as reasons for the expected cautious capital deployment by PE-VC firms this year.
However, India's robust economic fundamentals, including projected 6.5 per cent GDP growth in 2024 and policy support from the government, provide a positive outlook.
The country is expected to attract higher capital allocation compared to other emerging markets.
"While the long-term outlook for India remains strong, we expect 2024 will see deal activity somewhat subdued compared to 2021 and early 2022 due to factors like higher interest rates and geopolitical uncertainty," said Gustaf Ericson, Associate Partner at Bain & Company and co-author of the report.
The report highlights that India's manufacturing capabilities across sectors like electronics, pharmaceuticals, and chemicals position it to benefit from the China+1 strategy adopted by many companies.
Generative AI is also emerging as a focus area for PE-VC firms in India, with the technology expected to drive productivity gains of 30-40 per cent in portfolio companies across sectors like banking, IT, and software development.
While PE-VC investment value declined by around 35 per cent year-over-year to USD 39 billion in 2023, the year was a record one for exits, with the exit value rising 15 per cent to around USD 29 billion driven by strong public market sales.
(KNN Bureau)
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