India's Rising Consumer Base to Boost PE Investment in '25'

Investors are reviving their bets on India's high-growth sectors, says KPMG's Nitish Poddar

- Priyamvada C

Private equity (PE) firms are doubling down on India, lured by the country's expanding consumer base, advancements in healthcare and the rise of high-precision manufacturing. Armed with significant dry powder, investors are reviving their bets on India's high-growth sectors, according to Nitish Poddar, partner and India leader, private equity, KPMG in India.

Interest in India has remained strong in recent years, with the country accounting for nearly 20% of the total number of PE deals in Asia Pacific since 2019. In the first half of 2024, India's PE deal volume rose by 20% year-on-year, reversing a downtrend that began in the second half of 2021, according to KPMG's Asia Pacific Private Equity report released in December.

Investment values also rose, reaching $12.4 billion in the first half of 2024—up 14% from the previous six months—though still among the lowest levels seen over the past five years. The report further noted a steady decline in total deal values since peaking at $43.5 billion in the second half of 2021, suggesting that valuations are gradually becoming more rational.

India's consumer market remains a key draw for PE investments, benefiting from robust domestic demand and a growing middle class.