Riding the rally: Record PE, VC exits in 2023 worth Rs 97,500 crore; check details here

The stellar performance of the secondary market gave private equity (PE) and venture capital (VC) firms a golden opportunity for profitable exits in 2023, all thanks to consistent inflows from domestic institutional investors, especially.  

According to Nuvama Institutional Equities, the year gone by witnessed record-breaking PE/VC exits via the secondary market in India. 

Data collated by the brokerage showed that as many as 78 companies saw PE/VC exits totalling Rs 97,500 crore last year, with significant exits observed in Paytm (Rs 12,900 crore), Coforge (Rs 10,900 crore), Mankind (Rs 8,800 crore), Axis Bank (Rs 5,900 crore) and Sona BLW (Rs 4,900 crore). 

Alibaba, Berkshire Hathaway and SoftBank Corp were the exiting investors in Paytm. On the other hand, Baring Asia exited Coforge. Chrys Capital and Capital International were among the exiting investors of Mankind Pharma which got listed on bourses in May 2023. 

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The exits came amid the ongoing stellar bull run in the domestic equity markets. The benchmark equity index BSE Sensex gained nearly 19 per cent in 2023. On the other hand, the BSE SmallCap and BSE MidCap indices rallied 48 per cent and 46 per cent, respectively, during the same period. 

“The stellar rally in the midcap and small-cap delivered lucrative exits for investors, as 80 per cent of CY23 deals were from this category. In terms of market cap distribution, exits from midcap stood around Rs 48,700 crore (50 per cent), small-cap (Rs 29700 crore or 30 per cent) and large-cap (Rs 19200 core or 20 per cent),” Nuvama Institutional Equities said in a report.   

In terms of sectors, prominent exits were in financials (Rs 43,500 crore), consumer discretionary (Rs 17,800 crore), IT (Rs 12,400 crore), healthcare (Rs 11,600 crore) and industrials (Rs 10,000 crore). 

Overall, foreign-backed funds withdrew Rs 81,200 crore compared with Rs 16,300 crore of India-dedicated funds. Earlier, the record exit stood at Rs 91,700 crore by PE/VCs in 2021. 

 

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