India Private Equity Market

India Private Equity Market 2024, Size and Trends: 

The India private equity market size was valued at USD 61.5 Million in 2024. Looking forward, IMARC Group estimates the market to reach USD 347.07 Million by 2033, exhibiting a CAGR of 19.30% from 2025-2033. The market is driven by factors such as India's robust economic growth, expanding middle class, increasing investor confidence, a growing startup ecosystem, favorable government policies, sectoral advancements in technology and healthcare, attractive valuations, and a strong push toward digitization and sustainability, are major factors propelling the India private equity market share.

The market in India is largely driven by economic growth within the country and a stable GDP growth rate that provides an environment for private equity investments across many sectors. According to an industry report on September 17, 2024, India has emerged as a prominent hub for private equity (PE) investments, with 86% of investors planning increased allocations. Deal activity in India has rebounded in 2024, with significant growth in high-value transactions in sectors like consumer goods, healthcare, and technology.  The availability of debt financing and credit enhancements has further enhanced the financial ecosystem, helping private equity investors structure their investments more efficiently.

The considerable growth in institutional investor base pension funds and sovereign wealth funds add considerable capital flows to the market. Along with this, financial instruments like real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) open opportunities for private equity investments in the real estate and infrastructure sectors. In addition to this, increased access to external funding and expertise has allowed private equity investment in non-traditional sectors, including manufacturing and retail. According to an industry report, private equity investments in India's real estate sector raised by 10% in 2024, amounting to USD 4.3 billion. Foreign institutional investors infused 88% of the total inflows, with industrial and logistics sectors garnering the lion's share. Also, the foreign investment policy liberalization, including sector-specific relaxations, will continue to attract global private equity players, further strengthening India's position as a leading investment destination.

India Private Equity Market Trends:

Rapid Digitization and Technology Adoption

The rapid adoption of technology and the transformation of businesses across sectors are huge drivers of India private equity market share. Companies using technologies like artificial intelligence (AI), blockchain, and internet of things (IoT) attract massive investments in private equity. A robust push by the government toward the Digital India initiative and digital infrastructure development accelerates this trend. According to the report by the Ministry of Information & Broadcasting on December 8, 2024, India's digital infrastructure received a significant boost, with key initiatives such as the expansion of data centers, national cloud services, and the Digital Public Infrastructure (DPI). The government has introduced platforms like Aadhaar, UPI, and DigiLocker, transforming sectors like healthcare, education, and public services. The initiative also includes enhancing connectivity, rural outreach through Common Services Centers (CSCs), and a range of citizen-centric services through platforms like UMANG and API Setu. This paradigm shift towards tech-driven solutions is enhancing productivity and creating a good base for private equity participation. With rapid technological growth, technology-focused investments will capture a much larger share of private equity space over the foreseeable future. The growth of investor confidence is fueled by structural reforms and policies promoting digital infrastructure in the government.

Increased Focus on Consumer-Centric Sectors

Demographic shifts and growing consumer disposable incomes remain significant factors propelling India private equity market growth. Health, education, and consumers are witnessing greater demand and leading private equity investors to cash in on the increased momentum. Startups offering individualized care and health-tech telemedicine secured significant funding rounds. Also, the educational sector, particularly edtech, experience exponential growth with the increased penetration of digitization and incorporation of online learning platforms. For example, on September 20, 2024, PhysicsWallah, an Indian edtech company, secured USD 210 million in a Series B funding round led by Hornbill Capital, elevating its valuation to USD 2.8 billion. The funding amount will be utilized to expand the K-12 education market and scale up the offline business for the company. These trends underscore how private equity firms are making their growth strategies congruent with changing consumer needs, allowing them to gain long-term returns while contributing to the overall development of India's economy.

Emergence of ESG-Focused Investments

India private equity market outlook is changing due to environmental, social, and governance (ESG) considerations. More investors are investing their funds in sustainable companies with good corporate governance and ethical practices. Renewable energy projects, electric mobility solutions, and companies with a focus on diversity and inclusion are the focus of investments. This is indeed a new change in market approach where ESG-focused investments attend to global concerns and allow private equity firms to improve returns by being sustainable with societal and environmental gains in the long term. For example, on September 17, 2024, KfW's DEG unit announced plans to more than double its investments in India to USD 1 Billion, focusing on energy and infrastructure projects. DEG has already invested USD 400 Million in Indian companies, supporting sectors such as renewable energy, financial services, and green hydrogen. This initiative aligns with climate goals, aiming for 500 GW of clean energy by 2030, and is part of Germany's 2022 commitment to invest in energy transition.

India Private Equity Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the India private equity market, along with forecasts at the country and regional levels from 2025-2033. The market has been categorized based on fund type.

Analysis by Fund Type:

• Buyout
• Venture Capital (VCs)
• Real Estate
• Infrastructure
• Others

Buyout funds are at the forefront of the Indian private equity market transformation, especially concerning changes in well-established businesses in different sectors. Most buyout funds target the acquisition of controlling stakes in companies to rationalize their operations, increase efficiency, and subsequently unlock value. The manufacturing, healthcare, and technology sectors leverage buyouts, where the companies seek strategic investors to scale their operations. With increasing consolidation happening in most industries, buyout funds have emerged as critical in making businesses large, modern, and competitive enough for both domestic and international markets.

As per the India private equity market trends, venture capital funds form a very significant component of the Indian startup ecosystem. This funding enables innovative ventures in technology, e-commerce, fintech, and health tech. The key geographical locations for VC activity include Bengaluru, Mumbai, and Delhi-NCR, which attracts domestic and global investors. Other factors, such as the Startup India initiative and heightened digital penetration, further support the growth of VCs. VCs are significant in the private equity landscape as they back new ideas and high-growth ventures, which contribute significantly to job creation, economic growth, and technological advancement.

Real estate funds have a significant position in the private equity market in India, addressing the rising need for residential, commercial, and industrial spaces. With rapid urbanization and government initiatives like Smart Cities Mission and Housing for All, the sector attracts robust investments. REITs have emerged as another highly sought-after structure for institutional investment. Commercial space, especially office space, in Bengaluru and Mumbai has been gradually expanding and is largely driven by the needs of the IT and e-commerce sectors. The real estate fund is a cornerstone in modernizing infrastructure and answering the needs of India's exploding urban population.

Regional Analysis:

• South India
• North India
• West and Central India
• East India

As per the India private equity market forecast, South India is one of the important regions in the market. The growth of the technology sector, robust industrial base, and established infrastructure creates an attractive environment for the market. Major states such as Bengaluru, Chennai, and Hyderabad attract sizeable investments in IT, biotechnology, and healthcare. In addition to this, South India attracts funding in renewable energy, e-commerce, and edtech startups. South India has a robust education ecosystem, creating a steady supply of talent. Favorable state policies of the state are proactive, including the Telangana Innovation Policy and industrial initiatives in Tamil Nadu, which attract venture capital and private equity inflows.

North India holds strategic significance to the private equity landscape due to the largest consumer base and diversified industries, which comprise Delhi-NCR. This prominent financial hub also draws investments in fintech, logistics, and real estate. The region's expanding e-commerce market benefits from the growing middle class and digital adoption. States like Uttar Pradesh and Rajasthan are seeing increased private equity interest in agritech and manufacturing sectors. Government initiatives, including startup support programs in Haryana and Punjab, further bolster the investment ecosystem. The proximity to the national capital adds to the region's appeal for investors seeking market access and policy support.

West and Central India are significant to the private equity market. Maharashtra and Gujarat are the front-runners in industrial and financial growth. India's financial hub, Mumbai, is a popular region for startups, banking, and entertainment investments. Another important area of investment is the Gujarat region which focuses on manufacturing and renewable energy. Central India is rapidly emerging as a hub for investments in agribusiness and infrastructure, particularly in the states of Madhya Pradesh and Chhattisgarh. Strong infrastructure, economic reforms, and projects like GIFT City, the International Financial Services Centre in Gujarat, are making the region suitable for private equity firms looking for diversified opportunities.

East India is also gaining rapid momentum in the India private equity market demand due to natural resources, industrializing zones, and an untapped consumer base. Investments in mining, metals, and infrastructure are rising in Odisha, Jharkhand, and West Bengal. The city of Kolkata is an entry point for logistics and retail investments in the northeastern markets. The local growth is being driven by government efforts to develop connectivity and ease of doing business in the region. The regional concentration on renewable energy and agro industries presents further opportunities for private equity players.

Competitive Landscape:

The Indian private equity market is highly competitive, driven by a growing economy, a thriving middle class, and a sprouting startup ecosystem. Investors target sectors such as technology, consumer goods, financial services, and healthcare sectors where innovation and digital transformation have become the new growth drivers. The competitive landscape is characterized by both domestic and global players in the pursuit of opportunities, with increased competition within deal sourcing and valuations. Partnerships have become key strategies whereby PE firms cooperate with local investment funds and strategic investors and enhance capabilities in deal-making. For example, on November 30, 2024, Aster DM Healthcare and Quality Care India Ltd merged into one entity, Aster DM Quality Care Limited. Blackstone will have a 30.7% stake, and the Aster promoters will have a 24% stake in the combined hospital chain, which will then rank amongst India's top three. The total deal value amounts to INR 42,000 crore and is expected to close in Q3 FY26. The focus on sustainability and ESG factors is also changing investment strategies as firms seek to align with global trends and regulatory expectations in India.

The report provides a comprehensive analysis of the competitive landscape in the India private equity market with detailed profiles of all major companies.

Latest News and Developments:

• January 17, 2025: Netradyne, a fleet management software provider backed by Reliance Industries, announced the closing of its Series D round of funding led by Point72 Private Investments. The company has secured $90 million (nearly Rs 780 crore) in the funding round and witnessed participation from Pavilion Capital and Qualcomm Ventures.
• January 16, 2025: Motilal Oswal PE said that the company is in the process of launching its fifth fund to raise around $1 billion that will be used to invest in growth capital.
• September 10, 2024: FlexiLoans raised USD 34.5 Million in Series C funding led by Accion, Nuveen, Fundamentum, and Maj Invest. The funds will enhance its operations, expand offerings, and strengthen its technology to empower Indian MSMEs, especially in underserved tier 2 and 3 cities. With a fully digital platform, FlexiLoans has disbursed over INR 7,000 crores across 2,100 towns, advancing financial inclusion and economic opportunities for small businesses.
• December 11, 2024: a group of major investors in ReNew Energy Global proposed to take the company private in a deal valued at USD 2.82 Billion. This consortium includes Masdar and the Canada Pension Plan Investment Board. The offer of USD 7.07 per share reflects an 11.5% premium over the stock's closing price of USD 6.34 on December 10, 2024. This will provide shareholders with immediate liquidity and support India's energy transition.
• December 24, 2024: The Economic Times reported that the recent USD 4.1 billion initial public offering (IPO) of Vishal Mega Mart yielded a record USD 3.1 billion in capital gains for its private equity investor, marking the largest such profit in India's history. This six-year investment outperformed previous records, surpassing the USD 2 billion gains from SBI Cards by over 50%. This achievement underscores the potential of Indian capital markets to deliver significant returns for long-term investors.
• December 31, 2024, Viacom18 Media Private Limited became a direct subsidiary of Reliance Industries Limited. This transition followed the conversion of 24.61 crore compulsorily convertible preference shares into an equivalent number of equity shares, granting Reliance an 83.88% equity share capital in Viacom18.

India Private Equity Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the India private equity market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the India private equity market.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the India private equity industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.