PE/VC exits surge 36% to $24.8 bn in 2023 amid declining investments

The infrastructure sector emerged as the leader, attracting $11.6 billion in investments in 2023, while traditional favorites such as financial services and technology witnessed a decline

Private equity and venture capital (PE/VC) exits in India surged 36 per cent year-on-year (Y-o-Y) to touch $24.8 billion in 2023, up from $18.3 billion in the previous year, according to a report by EY-IVCA.

Open market exits, comprising 52 per cent of the total exits, reached a record high of $12.8 billion, while buoyant capital markets enabled the second-best year for PE-backed initial public offerings (IPOs).

Public listings stood at 30 in 2023, up from 18 in 2022, the report said.

This came even as the PE/VC investments in the country fell 11 per cent Y-o-Y to $49.8 billion across 853 deals in 2023, from $56.1 billion across 1,273 deals in 2022, due to a 33 per cent drop in the deal volume.

Moreover, investments among Indian startups fell 50 per cent during the year.

“Despite witnessing a decline in overall PE/VC investments, real assets backed infrastructure and real estate sectors experienced substantial growth. While the e-commerce sector faced a funding winter, other sectors such as healthcare and financial services saw significant activity,” said Vivek Soni, partner and national leader of Private Equity Services, EY India.

The infrastructure sector emerged as the leader, attracting $11.6 billion in investments in 2023, while traditional favourites such as financial services and technology witnessed a decline.

The healthcare sector, however, recorded a substantial growth of $5 billion, it said.

“The industry is anticipating a strategic shift in investment approaches, a rise in sectoral focus, and a resurgence in alternate capital investments after elections,” said Rajat Tandon, president, IVCA.