Mazars in India unveils Q3 2023 as peak quarter for PE investments in India: Robust deal volume surpasses all in 2023

Mazars in India unveils Q3 2023 as peak quarter for PE investments in India: Robust deal volume surpasses all in 2023
Mazars in India unveils Q3 2023 as peak quarter for PE investments in India: Robust deal volume surpasses all in 2023

New Delhi, 28 November 2023: Mazars in India, a globally renowned professional services firm, has launched its latest PE Deal tracker for the month of November 2023. It is a comprehensive report on the PE deal activity in India, shedding light on various aspects of the country’s economic landscape. The report covers key areas such as PE activity by stage of investment, PE activity by sector, key transactions, PE exits in India, PE exit trends by exit route along with Mazars’ insights.

Mr. Akhil Puri, Partner, Financial Advosry at Mazars in India said, “We expect positive growth in PE/VC investment activity in India and investors to become increasingly cautious in the short to mid-term. As we navigate through the end of 2023 and look forward to 2024, businesses and investors should remain receptive, agile and adaptable. These qualities will be key to seizing opportunities in these dynamic, unpredictable and evolving market conditions”.

PE Deal activity in India

Quarter wise private equity activity

In Q3 2023, a total of 260 deals worth approximately US$5.8bn were recorded as opposed to 350 deals totalling US$4.6bn in Q3 2022. This signifies a remarkable 24.2% rise in deal value and a simultaneous decline of 25.7% in deal volume.

PE activity by stage of investment

Angel/ Seed investment trend

Angel/ Seed investment category experienced a significant slowdown in both deal volume and value. Number of transactions within the category contacted by 36.1% to 147 deals during Q3 2023, down from 230 deals in Q3 2022. Similarly, the deal value in the quarter declined by 41.3% to US$247.2m, as compared to US$421.3m in Q3 2022.

Venture capital investment trend

With 25.0% share of the number of transactions and 34.0% share of the overall deal value, venture capital is the second biggest category in private equity dealscape. Q3 2023 saw a notable 28.6% drop-in activity, with only 65 deals compared to 91 in Q3 2022. Despite this, the overall deal value surged by 28.9% to US$2.0bn, up from US$1.5bn in the same quarter of 2022.

Private equity investment trend

Q3 2023 emerged as the most active quarter in the last five, boasting 25 PE deals valued at US$2.6bn—an impressive 93.5% increase in value and a 25.0% uptick in volume compared to Q3 2022. The category’s share surged to 44.2% in value (up from 28.4% in Q3 2022) and 9.6% in volume (compared to 5.1% in Q3 2022), making it a standout quarter in both deal number and value.

PE activity by sector

Deal volume in Q3 2023 saw increased activity solely in the industrials sector. Meanwhile, deal value surged in consumer discretionary, information technology, utilities, and telecommunication services. Information technology led in volume, constituting 55% of total deals, while consumer discretionary dominated in value, claiming a 33.5% share of the overall deal value in Q3 2023.

Key transactions

Top 5 investments

During Q3 2023, the top deal was valued at US$995.9m, six transactions above US$200m were recorded and the top 10 investments in the private equity dealscape accounted for about 54.0% of the overall transaction value.

Top exits

During Q3 2023, six transactions over the value US$200m. were recorded and some of the notable exits during the period include Tiger Global Management, Accel India, Franklin Templeton Investments, Antara Capital, The Qatar Investment Authority, DisruptAD, Binny Bansal’s exit from Flipkart at an estimated value of US$bn, Baring Private Equity Asia’s exit from Coforge at an estimated value of US$925.0m and True North’s exit from Niva Bupa Health Insurance at an estimated value of US$324.0m.

PE exits in India

Quarter wise PE exits in India

Much like PE investments, the Exit activity in PE dealscape also witnessed an uptick in activity, in fact Q3 2023 was the most active quarter in last two years in terms of both exit value and volume. As compared to Q3 2022, PE exits experienced a robust growth in activity, registering 46 deals amounting to US$6.2bn in Q3 2023, as compared to 29 exits amounting to US$1.1bn. in Q3 2022. This translated to a massive increase of 458.2% in value and a 58.6% increase in volume as compared to Q3 2022.

PE exit trends by exit route

PE exit route trends

In terms of exit value, merger/acquisition and open market route witnessed an upward trend in deal activity during Q3 2023 over Q3 2022. Merger/acquisition and open market route exits value increased by a whopping 810.0% and 447.5% and secondary sales exit rounds experienced a marginal contraction of 0.9% in value during the same period.

For more detailed insights and analysis, you can access the complete PE Deal Tracker here-