India's financial services and IT sectors will be the most attractive sectors for private equity buyouts this year, the head of the Indian Venture and Alternate Capital Association told Reuters this week.
This is a marked shift from 2024 when real estate and healthcare were the most sought-after sectors for PE buyouts with $4.3 billion and $2.9 billion worth of takeover deals completed, respectively, EY and IVCA data showed.
"When we come in and buy out a company, we don't want to run the business ourselves. It is easier to do it in sectors like these, which are more service-oriented," said Ashley Menezes, who is also the operating chief of PE firm ChrysCapital.
India reported a 39% jump in PE and venture capital buyouts to $16.8 billion in 2024, according to a report by EY and IVCA.
The takeover of telecom tower operator ATC India by Brookfield for $2.5 billion, the sale of packaging firm Manjushree Technopack to PE firm PAG for about $1 billion, and Shriram Housing Finance's sale to Warburg Pincus for $555 million were among the top Indian buyouts last year.
Menezes also said that the current pattern of companies gearing up for initial public offerings is a positive for PE and VC firms.
"Whether it's building up an independent board or just other corporate governance practices, (preparing for an IPO) just gears them to be a lot more attractive to a merger or a PE acquisition opportunity even if an IPO doesn't happen," he said.
Indian IPO volumes were the highest globally in 2024. Ninety-one large firms went public on Indian exchanges last year, raising a record 1.6 trillion rupees ($18.4 billion), data from Prime Database showed.
