Delivering Performance in
India's Private Markets
The India Opportunity
A 7 Trillion Dollar Economy In The Making
India's GDP is forecast to more than double to USD 7 trillion by 2030, making it the 3rd largest economy in the world.
Consumption will remain the biggest component, albeit with a far greater proportion allocated to discretionary spending. But it also stands to benefit from global tailwinds in both Services and Manufacturing exports, thanks to its proven and expanding technology capabilities.
For investors, listed equities provide access to those traditional companies in areas such as IT Services and Infrastructure, but it is the Private Markets which are providing access to the fastest growing sectors such as Retail, Technology and Healthcare.
Source: India: why it will be a $7 trillion economy by 2030 (Deutsche Bank, March 2023)
Morgan Stanley : Thoughts On The Market Podcast - What's Behind India's Growth Story
India's e-Conomy
Over 5x growth is projected for the Internet Economy, bringing it to USD 1 trillion by 2030 from ~USD 175bn in 2022.
Sources:
- India Venture Capital Report 2023 (Bain & Company, IVCA)
- e-Conomy India 2023 (Bain & Company, Google, Temasek);
India's large domestic market already allows technology companies to test and prove themselves at scale. With over 600 million internet users, the country has produced over 100 tech unicorns and has now overtaken China for it's rate of generating new unicorns.
Thanks to policy enablers such as Jan Dhan (financial inclusion) and the India Stack (digital infrastructure), this local opportunity is poised for significant further growth with both increased consumer affluence and the growing digital maturity of the 60 million MSMEs which already contribute 30% of India's GDP.
The Global Tailwinds
In parallel, as "Make in India, Make for the World" goes mainstream, a number of technology companies are realising growth on the global stage. For example, in 2022, 12-14 Indian SaaS firms achieved > USD 100 million ARR, up from just 1-2 in 2018.
Indian companies currently represent ~5% of global SaaS turnover. With its skilled workforce and geopolitical tailwinds (e.g. "China +1"), India is well placed to strengthen its global position.
Source: e-Conomy India 2023, Bain & Company, Google, Temasek
Why Private Markets?
Private Markets provide superior access to India's fastest growing sectors. For example, Technology represents 15% of the S&P BSE Sensex , and that is largely made up of the major IT Services companies (e.g. Infosys, TCS, HCL and Tech Mahindra) which account for over 80% of the Nifty IT Index.
Meanwhile, sectors such as Consumer & Retail, Technology & Healthcare accounted for over 60% of the PE deal volume in 2022.
India's growth will come through its rapidly maturing VC ecosystem which is demonstrating the returns and exit capabilities required to support a broader private market investor base.
The Opportunity In Secondaries
With pressure on GPs to show DPI, and insufficient Institutional capital in India to meet the supply of secondaries, there are many opportunities to access profitable companies that are operating at scale with:
Valuations at a discount to fair market value
3 - 5 year timeframes to listing
Source: CRISIL : Alternate Investment Funds Benchmarking Report
What We Do
