Press release
23 Jan 2025  | Mumbai, IN

PE/VC Investments in 2024 cross US$56 billion helped by an all-time high volume of 1,352 deals: EY-IVCA Report

Related topics
  • Buyouts emerged as the leading deal type in 2024, with a total investment of US$16.8 billion, followed by growth investments
  • Infrastructure sector continued its dominance and recorded US$12.1 billion followed by financial services - a top sector among the pure-play class
  • 2024 saw a rise in PE-backed IPOs, with 40 listings compared to 30 in 2023
  • Kedaara Capital closed the largest fundraise of 2024, securing US$1.73 billion for Kedaara IV

Mumbai, 23 January 2024: According to the IVCA-EY monthly PE/VC roundup, PE/VC exits in 2024 were at US$26.7 billion across 282 exits, a 7% growth y-o-y in value terms.

Vivek Soni, Partner and National Leader, Private Equity Services, EY said, “After two consecutive years of decline, PE/VC investment value increased by 5% year-on-year to US$56.0 billion (US$53.4 billion in 2023), primarily due to an increase in buyout investments in the infrastructure, technology and financial services sectors, which saw cumulative investments worth US$9.4 billion compared to US$3.5 billion in 2023. PE/VC deal volume surged by 54%, with 1,352 deals in 2024 compared to 880 deals in 2023. This growth was primarily fuelled by a 256% surge in volume of credit deals, with 310 deals driving a total investment of US$10.8 billion.

Sectorally, the marginal fall in infrastructure and real estate of 3% (US$20.9 billion in 2024 vs. US$21.5 billion in 2023) was offset by investments in the pure-play PE, which grew by 10% to reach US$35 billion (vs. US$31.9 billion in the previous year). However, in terms of the number of deals, both infrastructure & real estate and pure-play PE increased by 115% (267 deals in 2024) and 44% (1,085 deals in 2024), respectively. The year saw four deals greater than $1 billion aggregating to US$6.1 billion compared to six deals worth US$9.6 billion. The largest deal of the year involved the acquisition of ATC India Tower Corporation by Data Infrastructure Trust (a Brookfield-sponsored InvIT) for US$2 billion.

In 2024, the buoyant capital markets created a challenging environment for PE/VC investors due to the burgeoning bid-ask spread between investors and sellers. However, the same capital markets provided a tailwind for PE/VC exits, which recorded the second-highest number of deals (282 exits worth US$26.7 billion vs. 304 exits worth US$24.9 billion in 2023), reflecting a 7% year-on-year growth in value terms. Exits via the open market dominated this year’s exit activity with an all-time high of US$12.9 billion, accounting for 48% of overall exits during the year. PE-backed IPOs experienced the highest growth, rising by 130% in value terms.

Traditional sectors continued to dominate PE/VC investment activity. Despite a 7% decline in value terms, infrastructure remained the largest sector in 2024, with US$12.1 billion invested across 117 deals. This was followed by financial services (US$9 billion), real estate (US$8.8 billion), technology (US$6 billion), e-commerce (US$4.6 billion), and health sciences (US$4.3 billion). These sectors cumulatively accounted for 80% of investments. Similar to last year, 2024 witnessed 12 sectors receiving over US$1 billion in PE/VC investments.

PE/VC activity in 2024 was shaped by several factors, including key political events like India's general elections and the US presidential elections, ongoing geopolitical tensions, the U.S. Federal Reserve’s moves to manage interest rate changes and inflation, and their corollary impact on global liquidity and financing conditions. Also, the buoyant Indian capital markets and the depreciating Indian currency impacted PE/VC investor confidence and decision making.  Despite these challenges, PE/VC investment activity grew by 5% year-on-year after two years of decline, reflecting the strength of the country’s economic expansion, supported by robust fiscal health, rising GST collections, and a favorable macroeconomic environment.

2025 is expected to be a challenging year with many uncertainties yet to unfold. 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.  Structurally, Indian consumption appears to be slowing down, and we hope govt policy will address that.  We remain cautiously optimistic and hope that the recent correction in Indian equity markets will help close the valuation gap and boost the value and volume of PE/VC deal closures.  With significant amounts of dry powder with PE/VC funds and the potential re-alignment of geopolitical stars, we remain cautiously optimistic about the PE/VC outlook for 2025.”

Investments

After reaching an all-time high of US$76.7 billion in 2021, PE/VC investments declined by 28% in 2022 and 3% in 2023. However, in 2024, it rebounded with a 5% year-on-year growth, aggregating to US$56.0 billion, up from US$53.4 billion in 2023. This increase in deal value was driven by a 54% rise in deal volume, with 1,352 deals in 2024 compared to 880 in 2023, primarily caused by private credit deals, whose volume increased by 256%.

Notwithstanding the strong growth in deal volume, cumulative PE/VC investment value was tempered by lack of growth in large deals (deals exceeding US$100 million). Consistent with the previous year 2024 recorded 125 large deals; however, the cumulative investment value decreased by 9% ($37.8 billion in 2024 vs. US$41.7 billion in 2023). Large deals accounted for 68% of overall investments in 2024, down from 78% in the previous year. Notably, the number of billion-dollar-plus deals dropped from six in 2023 to four in 2024.

The real estate and infrastructure sectors experienced a slight decline of 3% ($20.9 billion in 2024 compared to US$21.5 billion in 2023), pure-play PE/VC investments increased by 10%, aggregating to US$35.0 billion compared to US$31.9 billion in 2023. In terms of deal volume, both pure-play and real estate & infrastructure asset classes increased by 44% (1,085 deals in 2024 vs. 756 deals in 2023) and 115% (267 deals in 2024 vs. 124 deals in 2023), respectively. The largest PE deal of 2024 saw Data Infrastructure Trust (a Brookfield-sponsored InvIT) acquire ATC India Tower Corporation, the Indian arm of American Tower Corporation, for US$2 billion.

Buyout investments emerged as the leading segment in 2024, recording US$16.8 billion across 58 deals, reflecting a 39% year-on-year growth (up from US$12 billion across 58 deals in 2023). Growth investments, which had been the top segment in the previous year, slid to second place, aggregating to US$13.4 billion across 182 deals, a 21% decline from US$17 billion across 147 deals in 2023. Credit deals clinched the third spot, reaching US$10.8 billion, a 52% increase from US$7.1 billion in 2023, with credit deal volume surging by 256% to 310 deals (up from 87 in 2023). Start-up investments followed closely, totalling US$10 billion across 645 deals, a 13% increase from US$8.9 billion across 477 deals in 2023. Lastly, PIPE investments recorded US$5 billion across 157 deals, a significant 40% decline compared to US$8.4 billion across 111 deals in 2023.

In 2024, PE/VC activity exhibited concentration across five to six sectors, with infrastructure, financial services, real estate, e-commerce, technology, and life sciences collectively accounting for 80% of total PE/VC investments by value and 66% by deal volume. Each of these sectors saw more than 100 deals during the year, compared to just two sectors reaching this milestone in 2023. Like last year, 2024 also witnessed 12 sectors receiving over US$1 billion in investments.

Infrastructure led the sector, attracting US$12.1 billion in investment, slightly down from US$13 billion in 2023, accounting for 22% of overall investments during the year. Financial services climbed one spot to second place, recording US$9.0 billion, a 41% year-on-year growth. Real estate secured third place, with US$8.8 billion, a slight growth of 3%. Among other traditionally PE/VC friendly sectors, technology saw a notable 56% growth, reaching US$6 billion, while e-commerce surged by 87%, totalling US$4.6 billion. However, the life sciences sector experienced a 31% decline, with investments falling from US$6.2 billion in 2023 to US$4.3 billion in 2024.

Exits

In 2024, exits worth US$26.7 billion were recorded, higher by 7% compared to 2023 (US$24.9 billion), and 46% higher compared to 2022 (US$18.3 billion). In terms of volume, exits in 2024 were the second highest ever, but saw a 7% decline compared to 2023 (282 deals in 2024 vs. 304 deals in 2023).

Open market exits remained dominant and recorded the highest ever exit value worth US$12.9 billion - marginally higher compared to the previous year (US$12.8 billion in 2023).

In 2024, PE-backed IPOs recorded the highest growth of 130% year-on-year in terms of value (US$3.3 billion in 2024 vs. US$1.4 billion in 2023) and were 33% higher in terms of number of deals, compared to the previous year. It was the only exit segment to grow in terms of volume in 2024 (40 deals in 2024 vs. 30 deals in 2023). Value of strategic exits and secondary exits grew by 5% (US$3.7 billion in 2024 vs. US$3.5 billion in 2023) and 1% (US$6.7 million in 2024 vs. US$6.6 billion in 2023), respectively.

The largest exit in 2024 saw Mankind Pharma acquire Bharat Serums and Vaccines from Advent International for US$1.6 billion.

PE/VC exit activity was predominantly concentrated in the financial services, technology, e-commerce, pharmaceuticals, infrastructure, healthcare, real estate, retail and consumer products, and industrial products sectors, each recording exits exceeding US$1 billion. The financial services sector saw exits worth US$5.9 billion across 68 deals; a 20% decline compared to 2023 (US$7.4 billion across 80 deals). This was followed by exits in the technology sector totalling US$4 billion across 27 deals, a 53% growth compared to 2023 (US$2.6 billion across 23 deals). E-commerce sector recorded exits worth US$2.7 billion across 30 deals, a 4% decline compared to 2023 (US$2.9 billion across 35 deals).

Fundraise

In 2024, fundraising saw a notable decline of 34%, with US$10.4 billion raised across 95 funds compared to US$15.9 billion raised across 102 funds in 2023, and a 40% drop compared to US$17.4 billion raised across 99 funds in 2022. After a period of significant growth in 2022, fundraising has followed a downward trend.

Despite this overall decline, two funds raised over a billion dollars in 2024.The largest of these was Kedaara Capital which closed its US$1.73 billion fund, Kedaara IV, the largest fund raised by an Indian private equity firm. Around 85% of Kedaara's new fund was raised from existing backers, including three of the largest Canadian pension funds—CPPIB, CDPQ, and OTPP.

Download the full pdf

Notes to Editors

About EY

EY exists to build a better working world, helping create long-term value for clients, people and society and build trust in the capital markets.

Enabled by data and technology, diverse EY teams in over 150 countries provide trust through assurance and help clients grow, transform, and operate.

Working across assurance, consulting, law, strategy, tax and transactions, EY teams ask better questions to find new answers for the complex issues facing our world today.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data, and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law were prohibited by local laws. For more information about our organization, please visit ey.com.

This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.

About IVCA

The Indian Private Equity & Venture Capital Association (IVCA) is the apex body promoting the Alternative Investment Funds (AIFs) in India and promotes stable, long-term capital flow (Private Equity (PE), Venture Capital (VC) and Angel Capital) in India.

With leading VC/ PE firms, institutional investors, banks, corporate advisers, accountants, lawyers, and other service providers as members, it serves as a powerful platform for all stakeholders to interact with each other. Being the face of the industry, it helps establish high standards of governance, ethics, business conduct and professional competence. With a prime motive to support the ecosystem, it facilitates contact with policy makers, research institutions, universities, trade associations and other relevant organizations. Thus, support entrepreneurial activity, innovation, and job creation.


Related news

Unlocking productivity gains, GenAI to transform 38 million jobs by 2030: EY India

New Delhi, 14 January 2025. Generative AI poised to impact 38 million jobs; promises productivity boost by 2030 according to the EY India

November 2024 recorded PE/VC Investments worth US$4 billion across 87 deals; a 156% Y-o-Y hike: EY-IVCA Report

Mumbai, 18 December 2024.November 2024 recorded PE/VC Investments worth US$4 billion across 87 deals; a 156% Y-o-Y hike according to the EY-IVCA Report

UPI most preferred payment mode for ~38% Indians in rural and semi-urban areas; 96% demonstrate strong inclination to save and invest: EY and CII report

New Delhi/Mumbai, 17 December 2024 .UPI most preferred payment mode for ~38% Indians in rural and semi-urban areas; 96% demonstrate strong inclination to save and invest according to the EY and CII report