Mumbai, Maharashtra, India:
- FY22 recorded 2182 deals worth $69.15 billion, a 47% surge in deal value and 46% in deal volume, YoY
- 55 startups turned unicorns in FY22, contributing 68% to the overall deal activity
- Private Equity (PE)/Venture Capital (VC)/Seed funds accounted for 59% of investors in FY22, followed by angel investors at 32%
- The Information Technology (IT) industry continued to lead, increasing by 81% YoY, and accounting for 46% of the overall PE exit deal activity
- PE contributed a 75% share in the overall deal value, which came from 164 big-ticket deals worth $51.86 billion
- In PE deals, IT continued its dominance with a 50% YoY increase in terms of both, deal activity & deal value, benefiting from spur in relative demand and new-age companies
- The total number of Mergers & Acquisitions (M&A) deals worth $55.84 billion, hit a 5-year high
- M&A turned out to be the preferred route for exits, contributing 54% to the overall exit activity
- Domestic M&A deals contributed to 61% of the total deal value, witnessing a rise of 34% YoY
- Early-Stage Deals continue to top the chart by contributing 80% to the overall deal activity
IIFL Wealth & Asset Management (IIFL WAM) in association with VCCEDGE has launched the second edition of India Invests Report 2022 (earlier India Investment Ecosystem Report). The report provides an overview of PE investments, funds and exits as well as M&A deals, while mapping out the startup environment and their contribution to PE investments.
The second edition of India Invests
Report 2022 was launched at TiEcon 2022 - India’s largest Unicorn Summit at the Jio World Convention Centre in Mumbai. Click link to download report: India Invests Report 2022
According to India Invests 2022, PE investments touched an all-time high in FY22. The report identified that IT has outperformed all sectors
with a 50% increase in investments as compared to FY21. The IT industry continued to lead, both in terms of deal volume and value, increasing by 81% on a YoY basis, and accounting for 46% of the overall PE exit deal activity.
The big-ticket agreements ($100 million+) saw increased activity during FY22 with 164 deals totalling $51.86 billion in value. This accounts for 75% of all PE investments. As India overtakes the UK as the third-largest startup ecosystem, domestic startups have registered all-time high investments. FY22 has seen the birth of 55 unicorns, bringing the total number in India to 103.
M&A deals turned out to be a preferred route for exits as they contributed to 54% of the overall exit activity followed by Secondary Sales and Equity Capital Market, which contributed 21% and 13% respectively to the overall exit activity. M&A saw a tremendous increase in transaction value and deal activity, with a surge of 17% and 33% YoY, respectively. In FY22, the number of M&A deals remained strong at 969, with a total deal value of $55.84 billion. There were 637 domestic M&A agreements worth $33.92 billion, representing a 34% increase in value and a 46% increase in deal activity from FY21. Interestingly, the top ten transactions of FY22 account for 43.41% of the entire deal value.
For PE funds, the amount and number of funds raised, increased significantly by 46% and 23% respectively, on a YoY basis. PE investors have had a good year in terms of exits. FY22 had an all-time high exit value and a 116% rise over the previous year. Exit activity, surged by 24% YoY, due to PE-backed IPOs.
Startups captured a large portion of PE deals - 1710, representing 68% of the overall PE deal activity.
Mr. Yatin Shah, Co-Founder & Joint CEO, IIFL Wealth, said, “The Indian PE/VC market has matured over the previous year, transitioning from a young alternative asset class to a much mature ecosystem. Companies and governments across the world have been embracing digital solutions to meet the needs of the altered environment and stay ahead of the competition after the pandemic. This was reflected in VC funding and the creation of innovative, digitally-based company models across several industries. The India Invests Report 2022 has assessed the robust funding landscape and identified trends that can translate into areas of opportunity and growth.”
Mr. Anirudha Taparia, Joint CEO, IIFL Wealth, commented, “Indian startups are well-positioned to meet the evolving demands of the Indian and global diasporas, and they are expected to receive additional capital in the coming years. While it took a decade for the VC/PE ecosystem to mature into its current shape, we anticipate that the next phase of its expansion will be significantly more rapid and expedited. IIFL Wealth along with VCCEDGE will continue to capture these evolving trends, which will allow the ecosystem stakeholders to maximise present and future possibilities.”
The India Invests Report 2022 is the second edition of a regular series, which IIFL Wealth and Asset Management in association with VCCEDGE publishes bi-annually. The data included in the report is up to March 2022.