印度私募股权和风险投资退出格局：两个减半的故事

India PE and VC Exit Landscape:A Tale of Two Halves2IPO markets in India have bucked the global trend and have been ona tear over the past year providing juicy exits to investors. However,these distributions represent a small fraction of the total capitalinvested, and most of the investors in AIFs continue to have an acuteproblem of converting their paper returns into cash. The distributionsto paid-in capital (DPI)plaguing investors. The average DPI for Category II AIFs launched in2015 and 2020 stands at a paltry 0.8x and 0.5x, respectively, whereasthe average total value to paid-in (TVPI)(2)metric for these vintages is1.1x and 1.2x, respectively. PE and buyout funds have fared muchbetter on the DPI metric relative to VC and growth funds benefittingfrom strong public market activity. However, the overall DPIgenerated by Indian funds is lower than North American andEuropean funds and has been trailing across vintages.A basic tenet for LPs to reinvest in managers or an ecosystem is thatthey need cash distributions to recycle them into new funds. With theenhanced focus on distributions in the current environment, DPI isthe “new IRR” for LPs. Traditional exit paths—IPOs, strategic sales,and sponsor-to-sponsor transactions—have not generated thedesired liquidity for the LPs. With the limits of these traditional exitavenues, GPs are strugglingto fully exit their maturing assets, and LPsare left with capital stuck in aging funds.Indian Alternative InvestmentFunds (AIFs) surpassed $146billion in lifetime commitmentsin September 2024, withCategory II AIFs making uproughly 80% of the total. Abuoyant economy, soaringvaluations, an increase inparticipation from domesticinvestors, and an aversion ofglobal investors to invest inChina since the pandemic havecontributed to the growth ofAIFs, but how have the IndianAIFs fared in terms of returningcapital to investors?(1) DPI represents the ratio of (i) capital returned by investment manager to (ii) total investments made by the LPs.(2) TVPI represents the ratio of (i) sum of total value of realised distributions and fund’s residual value to (ii) total investments made by the LPs.(3) RVPI represents the ratio of (i) fund’s residual value to (ii) total investments made by the LPs.(4) Category II AIFs include equity funds (listed and unlisted), real estate funds (including residential debt-oriented), debt funds, and distressed asset funds.Source for Category II Indian AIFs’ Return Across Vintages: CRISIL Alternative Investment Funds Benchmarks (India—2024). Returns are calculated on a post-expense, pre-carry, pre-tax basis and in U.S. dollars for the period April 1 to March 31. (1)metric captures the essence of the problem Exit Landscape forSponsor-BackedIndian Companies(1)3Initial Public Offerings (IPOs)($in Millions)$247$1,245$5,169$1,1178944180.02019202020212022Deal ValueDeal CountIn CY 2024,the value of IPO exits for financial sponsors nearlytripled over the previous year. Supported by strongermacroeconomic tailwinds and high investor appetite for new-agetech businesses, PE funds were able to bring their marquee assetsto the IPO market as evidenced by the successful listing of Swiggy,Ola Electric, FirstCry, GoDigit Insurance, Emcure Pharmaceuticals,andixigo, among others. In 2025, more sponsor-backedcompanies, including Meesho, Zepto, Ofbusiness, Fractal Analytics,Smartworks,boAt, andPayU, are expected to tap the primarymarkets. While the current IPO environment provides a moredesirable exit option for scaled profitable new-age businesses,IPOs alone may not be the magic bullet to solve the DPI challengesfaced by sponsors.(1) Sources for exits: EY IVCA–India Trend Book 2021-24, EY IVCA–H1 2024 half-yearly, Q3 2024, October 2024 and November 2024 roundups, and public sources.Exits data is based on calendar year. Secondary Deals($ in millions)$2,465$91334200.020192020Secondary markets for private assets in India are evolving, withGPs looking beyond traditional sponsor-to-sponsor exit routesand embracing innovative exit strategies such as GP-ledsecondaries. ChrysCapital’s $700 million single-asset continuationfund transaction for its stake in NSE is a case in point. Lightboxalso announced a $100 million continuation fund for its matureportfolio companies. Global PE funds looking to increase theirallocation to India are acquiring minority stakes in growth-stageand late-stage companies from existing investors. Temasek andFidelity’s $200 million stake purchase in Lenskart from existinginvestors is an example of this trend. Meanwhile, sponsor-to-sponsor exit activity continues to be robust; notable transactionsfor this year include Blackstone’s $950 million stake sale in VFSGlobal to Temasek, ChrysCapital’s $860 million stake sale in GeBBSto EQT, Apax Partner’s sale of Healthium to KKR for $830 million,Advent’s sale of Manjushree Technopak to PAG for $1 billion, andChiratae’s $70 million portfolio sale to Madison India. Strategic Exits($ in millions)$1,942$1,02655440.020192020