Menu Our services in the selected location:
  • No services available for your region.
Select Location:
Remember my selection
Your browser is out of date.


December 15, 2022  |  8 Minute Read

Stephanie Hui

Head of Private Equity in Asia and Global Co-Head of Growth Equity

Stephanie Hui

Key Takeaways

  • India has seen an influx of private market capital in recent years, with tailwinds from broad market reforms and governance enhancement.


  • The nature of dealmaking is evolving, with more appetite for buyouts and control transactions as well as greater participation from domestic fund managers.


  • The large, rapidly growing economy and population has led to challenges but also created domestic investment opportunities in areas such as technology, healthcare and renewable energy.

In investment circles, the definition of “Asia” is evolving. Particularly in the private markets, investors have typically used “Asia” as shorthand for China or Japan. In recent years, however, India has become an increasingly popular market for both fund managers and capital allocators. Much of the broader appeal comes from the sheer size of the opportunity, with India recently surpassing the UK to become the world’s fifth-largest economy. India’s trajectory is strong too, thanks to a young and highly educated population combined with rising adoption of the internet, ecommerce, and other technology. India’s GDP growth exceeded China’s in 2021 and is expected to more than double in 2022.1 By 2050, the Indian economy is anticipated to grow to $30 trillion.2


Over the last decade, private market activity in India experienced a growth phase followed by a plateau in activity. The COVID-19 pandemic served as a catalyst for another step change, with invested capital hitting all-times highs for three consecutive years through 2021. Part of this follows the trend of private markets more broadly, but India is also enjoying tailwinds from regulatory changes and increasingly pro-business sentiments. Public equity markets in particular are undergoing needed reforms, providing increased exit opportunities while also encouraging a new era of startups and entrepreneurs.



Opening to Outside Ownership

Historically, private market activity in India has been focused on non-control transactions, with a skew towards venture capital. Deals tended to be smaller, either focused on startups or family-owned businesses that preferred to only sell small ownership stakes. As with other countries, however, there has been a push towards greater institutionalization of businesses as well as heightened understanding and appreciation for the merits of outside equity ownership. This has led to larger transaction sizes broadly, including an increase in majority buyout deals. While buyouts are becoming more common, minority transactions remain the norm even in more developed companies.


Indian private markets remain young but are rapidly maturing, leading to new and expanding exit opportunities that propelled activity to an all-time high in 2021.3 Sales to strategic acquirers are the predominant exit route, but growth in the private market ecosystem has led to an increasing rate of secondary buyouts, with subsequent periods of institutional ownership helping to build best practices that permeate beyond a specific company or industry. As financing evolves to meet needs at specific stages of the company lifecycle, new deal types and structures have taken hold, including structured pre-IPO rounds.


In the past year, companies have been opting for private market funding rather than entering India’s public market. Part of this trend has been due to the prevalence of private capital, but shortcomings in the IPO process and restrictive public market regulations have also deterred companies from listing. Loss-making companies have been effectively restricted from public markets, with stringent lockups and low liquidity. With few new public market opportunities, crossover investors including mutual funds have become active participants in private markets. Domestic firms have also sought out pre-IPO opportunities, raising funds from local high-net-worth investors.



Private Equity Investment Has Outstripped Public Equity Issuance in Recent Years


Source: Venture Intelligence, Bloomberg, Goldman Sachs Global Investment Research. As of November 2022.



As a result of the deterrents to new listings, India’s public markets are currently dominated by older companies in legacy industries; financial services and energy account for nearly half (47%) of the SENSEX market cap, compared to only about 15% of the S&P 500, which is more heavily weighted towards IT, healthcare, and consumer discretionary. This has left significant room for additional listings and market cap expansion.4 In response, the Securities and Exchange Board of India has enacted reforms around governance and public listings, especially for high-growth companies with no earnings. Some examples include reduced lockups, fewer conditions for migrating to the main board, and the allowance of discretionary allotments. The reforms represent a step towards aligning India’s capital markets with global best practices and seem to already be having an impact, with IPO activity increasing alongside gains in the public markets in late 2021. IPO activity is down YTD in 2022, however, reflecting the broader slowdown in global markets.



A Familiar Story

The dynamics between public and private markets in India require investors to develop the requisite skillset to navigate both. India’s growth story parallels China’s in many ways, beginning as hub for outsourcing and export-oriented business that drew initial investment before developing into a more mature market with attractive domestic opportunities. As a result, success in India is also largely predicated on the same cornerstones of the playbook that dealmakers initially applied in China: marrying the deep local knowledge and on-the-ground presence required to navigate a vast country with complex systems, together with the international experience and connections needed to build partnerships and expand operations globally.


With heightened interest from both fund managers and capital allocators, India has seen a spike in private market fundraising in recent years; however, absolute levels of dedicated capital remain low. Many of the most active financial sponsors in India are global firms with a local presence. Most of the capital allocators in these vehicles are also based outside of Asia, predominately in the US, Europe, and the Middle East. Even as more capital is deployed in India, many institutional investors remain significantly under allocated relative to the size of the market. One ongoing hurdle for this group is the high costs to hedge exposure to the rupee, given the volatility of the currency. This is particularly challenging for strategies with lower risk/return profiles, where hedging costs can eat materially into investment returns.


China-based funds were also early entrants to the Indian market, but the universe of India-based funds is quickly expanding. Still, investment activity has outstripped domestic fundraising in recent years, with many large general partners (GPs) investing via regional funds rather than India-specific vehicles. In addition to a large foreign manager presence, the private market landscape in India looks different than many other geographies, including relatively less activity from closed-end funds. In addition to the crossover fund mentioned previously, India has a high concentration of fundless sponsors that raise capital to finance specific deals.



India-Based Private Market Assets Have Doubled in the Last Five Years


Source: Preqin Pro. As of December 2021.



Maturing Market

Rising competition has pushed up valuations, particularly in areas popular during the initial uptick in private market activity a decade ago, such as consumer tech and fintech. As dealmakers become more familiar with the India ecosystem, financial sponsors are expanding into new geographies and industries, looking beyond well-known centers like Mumbai and to large yet growing hubs like Hyderabad. The IT sector remains the cornerstone of activity and currently accounts for more than 60% of investment, partially attributable to the slant towards venture capital investment, whereas traditional consumer and enterprise categories are more prevalent in development markets.


India’s large population of young, educated, English-speaking, digitally savvy people is particularly well-equipped for the IT services sector, creating a strong foundation for expansion in global markets. During the pandemic, India proved its viability as a tech outsourcing destination with companies continuing to deliver services to an international clientele. The pandemic also exposed global supply chain vulnerabilities, leading many to broaden capabilities in India and elsewhere to reduce concentrated exposure to single markets such as China, in what is often referred to a “China Plus One” strategy. In addition to outsourcing capabilities, India is a large market in and of itself, with considerable domestic consumer opportunities due to a longer period of underinvestment.

Building for Growth

Indian office real estate has seen a wave of investment over the past two decades, growing to become Asia’s largest office market. Much of this growth has been driven by the IT sector, with expansion in markets such as Bengaluru and Hyderabad. The growing market has led global investors to increase allocations to commercial real estate, with numerous large portfolio acquisitions completed in the past five years. Relatively recent passage of REIT legislation has also resulted in the launch of public REITs dedicated to owning commercial real estate as the sector continues to institutionalize. At the same time, the residential sector is witnessing strong demand trends driven by continued income growth and urbanization. An improved regulatory framework and consolidation to higher quality developers are also supportive of a more balanced and healthy real estate market in the long term. As the country continues to grow, rising consumerism and urbanization will fuel the need for more private investment in new economy sectors such as logistics facilities and data center assets.

India’s population is set to surpass China’s by 2030, but high recent growth and a strong forward trajectory have resulted in some growing pains. Investment in basic infrastructure is required; sustainable energy will be needed going forward, presenting both challenges and opportunities. India has a high need for energy and nearly three-quarters of its electricity comes from coal, resulting in the third-highest level of emissions globally and concomitant pollution that often impedes daily life. India is also highly dependent on oil and is a net importer, which has resulted in fuel shortages. Refining plays an important role in the economy, however, with India a net exporter of refined products, further complicating the situation.5


While the low dependency ratio puts India in a favorable position, the country still requires expanded medical access, including fundamental services like hospitals, to meet the needs of the growing population. The private sector has been particularly active in multi-specialty hospitals as better quality and more complex treatment options are sought out, with double-digit growth rates expected through at least 2025.6 Given India’s needs and competitive advantages, healthcare services is an area with a strong outlook as technology can be leveraged in a variety of ways to both meet domestic needs and build scalable businesses that compete on a global level.



Maximizing Potential

India benefits from demographic tailwinds and recent reforms that have improved the environment for business, but the country is far from realizing its full potential. Despite favorable demographics, labor force participation has fallen over the last decade.7 Internet usage is high on an absolute basis, but penetration is low relative to global figures and other Asian countries. Modern infrastructure, supported by sustainable energy sources, will be needed. With the right reforms and continued improvements, India’s market growth could exceed 8% annually over the next decade.


Going forward, private market investing in India is primed to grow in tandem with the country. The improvements required across India will present opportunities for investment. Fund managers, both local and abroad, are benefitting from maturation of the market and developing new ways to support companies. Capital allocators have new ways to access private market companies at all stages of developments. Developments in public markets have made the route to exit clearer, encouraging a new wave of startups and entrepreneurship.





Related Insights

Start the Conversation

Committed to providing you with the insights you need to build your practice.


1 Goldman Sachs Global Investment Research. As of October 2022 

2 EY, Indian Economy by 2050: In Pursuit to Achieve the $30 Trillion Mark. As of August 25, 2022 

3 Bain & Company, India Private Equity Report. As of 2022

4 Goldman Sachs Global Investment Research. As of September 19, 2021

5 Goldman Sachs Global Investment Research, July 4, 2022

6 Bain. As of June 2022

7 Goldman Sachs Global Investment Research, August 5, 2022

Risk Considerations

Emerging markets securities may be less liquid and more volatile and are subject to a number of additional risks, including but not limited to currency fluctuations and political instability.

Hedge funds and other private investment funds (collectively, “Alternative Investments”) are subject to less regulation than other types of pooled investment vehicles such as mutual funds. Alternative Investments may impose significant fees, including incentive fees that are based upon a percentage of the realized and unrealized gains and an individual’s net returns may differ significantly from actual returns. Such fees may offset all or a significant portion of such Alternative Investment’s trading profits. Alternative Investments are not required to provide periodic pricing or valuation information. Investors may have limited rights with respect to their investments, including limited voting rights and participation in the management of such Alternative Investments.

Alternative Investments often engage in leverage and other investment practices that are extremely speculative and involve a high degree of risk. Such practices may increase the volatility of performance and the risk of investment loss, including the loss of the entire amount that is invested. There may be conflicts of interest relating to the Alternative Investment and its service providers, including Goldman Sachs and its affiliates. Similarly, interests in an Alternative Investment are highly illiquid and generally are not transferable without the consent of the sponsor, and applicable securities and tax laws will limit transfers.

Conflicts of Interest

There may be conflicts of interest relating to the Alternative Investment and its service providers, including Goldman Sachs and its affiliates. These activities and interests include potential multiple advisory, transactional and other interests in securities and instruments that may be purchased or sold by the Alternative Investment. These are considerations of which investors should be aware and additional information relating to these conflicts is set forth in the offering materials for the Alternative Investment.

General Disclosures

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.

This material is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. This material is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and makes no implied or express recommendations concerning the manner in which any client’s account should or would be handled, as appropriate investment strategies depend upon the client’s investment objectives.


Prospective investors should inform themselves as to any applicable legal requirements and taxation and exchange control regulations in the countries of their citizenship, residence or domicile which might be relevant.

References to indices, benchmarks or other measures of relative market performance over a specified period of time are provided for your information only and do not imply that the portfolio will achieve similar results. The index composition may not reflect the manner in which a portfolio is constructed. While an adviser seeks to design a portfolio which reflects appropriate risk and return features, portfolio characteristics may deviate from those of the benchmark.

Economic and market forecasts presented herein reflect a series of assumptions and judgments as of the date of this presentation and are subject to change without notice. These forecasts do not take into account the specific investment objectives, restrictions, tax and financial situation or other needs of any specific client. Actual data will vary and may not be reflected here. These forecasts are subject to high levels of uncertainty that may affect actual performance. Accordingly, these forecasts should be viewed as merely representative of a broad range of possible outcomes. These forecasts are estimated, based on assumptions, and are subject to significant revision and may change materially as economic and market conditions change. Goldman Sachs has no obligation to provide updates or changes to these forecasts. Case studies and examples are for illustrative purposes only.

This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. This material has been prepared by GSAM and is not financial research nor a product of Goldman Sachs Global Investment Research (GIR). It was not prepared in compliance with applicable provisions of law designed to promote the independence of financial analysis and is not subject to a prohibition on trading following the distribution of financial research. The views and opinions expressed may differ from those of Goldman Sachs Global Investment Research or other departments or divisions of Goldman Sachs and its affiliates. Investors are urged to consult with their financial advisors before buying or selling any securities. This information may not be current and GSAM has no obligation to provide any updates or changes.

Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. We have relied upon and assumed without independent verification, the accuracy and completeness of all information available from public sources.

Goldman Sachs does not provide legal, tax or accounting advice to its clients. All investors are strongly urged to consult with their legal, tax, or accounting advisors regarding any potential transactions or investments. There is no assurance that the tax status or treatment of a proposed transaction or investment will continue in the future. Tax treatment or status may be changed by law or government action in the future or on a retroactive basis.

Views and opinions expressed are for informational purposes only and do not constitute a recommendation by GSAM to buy, sell, or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change, they should not be construed as investment advice.

Past performance does not guarantee future results, which may vary. The value of investments and the income derived from investments will fluctuate and can go down as well as up. A loss of principal may occur.

United Kingdom: In the United Kingdom, this material is a financial promotion and has been approved by Goldman Sachs Asset Management International, which is authorized and regulated in the United Kingdom by the Financial Conduct Authority.

European Economic Area (EEA):This material is a financial promotion disseminated by Goldman Sachs Bank Europe SE, including through its authorised branches ("GSBE"). GSBE is a credit institution incorporated in Germany and, within the Single Supervisory Mechanism established between those Member States of the European Union whose official currency is the Euro, subject to direct prudential supervision by the European Central Bank and in other respects supervised by German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufischt, BaFin) and Deutsche Bundesbank.

Switzerland: For Qualified Investor use only – Not for distribution to general public. This is marketing material. This document is provided to you by Goldman Sachs Bank AG, Zürich. Any future contractual relationships will be entered into with affiliates of Goldman Sachs Bank AG, which are domiciled outside of Switzerland. We would like to remind you that foreign (Non-Swiss) legal and regulatory systems may not provide the same level of protection in relation to client confidentiality and data protection as offered to you by Swiss law.

Asia excluding Japan: Please note that neither Goldman Sachs Asset Management (Hong Kong) Limited (“GSAMHK”) or Goldman Sachs Asset Management (Singapore) Pte. Ltd. (Company Number: 201329851H ) (“GSAMS”) nor any other entities involved in the Goldman Sachs Asset Management business that provide this material and information maintain any licenses, authorizations or registrations in Asia (other than Japan), except that it conducts businesses (subject to applicable local regulations) in and from the following jurisdictions: Hong Kong, Singapore, Malaysia, India and China. This material has been issued for use in or from Hong Kong by Goldman Sachs Asset Management (Hong Kong) Limited, in or from Singapore by Goldman Sachs Asset Management (Singapore) Pte. Ltd. (Company Number: 201329851H) and in or from Malaysia by Goldman Sachs (Malaysia) Sdn Berhad (880767W).

Australia: This material is distributed by Goldman Sachs Asset Management Australia Pty Ltd ABN 41 006 099 681, AFSL 228948 (‘GSAMA’) and is intended for viewing only by wholesale clients for the purposes of section 761G of the Corporations Act 2001 (Cth). This document may not be distributed to retail clients in Australia (as that term is defined in the Corporations Act 2001 (Cth)) or to the general public. This document may not be reproduced or distributed to any person without the prior consent of GSAMA. To the extent that this document contains any statement which may be considered to be financial product advice in Australia under the Corporations Act 2001 (Cth), that advice is intended to be given to the intended recipient of this document only, being a wholesale client for the purposes of the Corporations Act 2001 (Cth). Any advice provided in this document is provided by either of the following entities. They are exempt from the requirement to hold an Australian financial services licence under the Corporations Act of Australia and therefore do not hold any Australian Financial Services Licences, and are regulated under their respective laws applicable to their jurisdictions, which differ from Australian laws. Any financial services given to any person by these entities by distributing this document in Australia are provided to such persons pursuant to the respective ASIC Class Orders and ASIC Instrument mentioned below.

  • Goldman Sachs Asset Management, LP (GSAMLP), Goldman Sachs & Co. LLC (GSCo), pursuant ASIC Class Order 03/1100; regulated by the US Securities and Exchange Commission under US laws.
  • Goldman Sachs Asset Management International (GSAMI), Goldman Sachs International (GSI), pursuant to ASIC Class Order 03/1099; regulated by the Financial Conduct Authority; GSI is also authorized by the Prudential Regulation Authority, and both entities are under UK laws.


  • Goldman Sachs Asset Management (Singapore) Pte. Ltd. (GSAMS), pursuant to ASIC Class Order 03/1102; regulated by the Monetary Authority of Singapore under Singaporean laws
  • Goldman Sachs Asset Management (Hong Kong) Limited (GSAMHK), pursuant to ASIC Class Order 03/1103 and Goldman Sachs (Asia) LLC (GSALLC), pursuant to ASIC Instrument 04/0250; regulated by the Securities and Futures Commission of Hong Kong under Hong Kong laws


No offer to acquire any interest in a fund or a financial product is being made to you in this document. If the interests or financial products do become available in the future, the offer may be arranged by GSAMA in accordance with section 911A(2)(b) of the Corporations Act. GSAMA holds Australian Financial Services Licence No. 228948. Any offer will only be made in circumstances where disclosure is not required under Part 6D.2 of the Corporations Act or a product disclosure statement is not required to be given under Part 7.9 of the Corporations Act (as relevant).

Canada: This presentation has been communicated in Canada by GSAM LP, which is registered as a portfolio manager under securities legislation in all provinces of Canada and as a commodity trading manager under the commodity futures legislation of Ontario and as a derivatives adviser under the derivatives legislation of Quebec. GSAM LP is not registered to provide investment advisory or portfolio management services in respect of exchange-traded futures or options contracts in Manitoba and is not offering to provide such investment advisory or portfolio management services in Manitoba by delivery of this material.

Japan: This material has been issued or approved in Japan for the use of professional investors defined in Article 2 paragraph (31) of the Financial Instruments and Exchange Law by Goldman Sachs Asset Management Co., Ltd. South Africa: Goldman Sachs Asset Management International is authorised by the Financial Services Board of South Africa as a financial services provider.

Malaysia: This material is issued in or from Malaysia by Goldman Sachs (Malaysia) Sdn Bhd (880767W)

Hong Kong: This material has been issued or approved for use in or from Hong Kong by Goldman Sachs Asset Management (Hong Kong) Limited.

Singapore: This material has been issued or approved for use in or from Singapore by Goldman Sachs Asset Management (Singapore) Pte. Ltd. (Company Number: 201329851H).

Bahrain: This material has not been reviewed by the Central Bank of Bahrain (CBB) and the CBB takes no responsibility for the accuracy of the statements or the information contained herein, or for the performance of the securities or related investment, nor shall the CBB have any liability to any person for damage or loss resulting from reliance on any statement or information contained herein. This material will not be issued, passed to, or made available to the public generally.

Kuwait: This material has not been approved for distribution in the State of Kuwait by the Ministry of Commerce and Industry or the Central Bank of Kuwait or any other relevant Kuwaiti government agency. The distribution of this material is, therefore, restricted in accordance with law no. 31 of 1990 and law no. 7 of 2010, as amended. No private or public offering of securities is being made in the State of Kuwait, and no agreement relating to the sale of any securities will be concluded in the State of Kuwait. No marketing, solicitation or inducement activities are being used to offer or market securities in the State of Kuwait.

Oman: The Capital Market Authority of the Sultanate of Oman (the "CMA") is not liable for the correctness or adequacy of information provided in this document or for identifying whether or not the services contemplated within this document are appropriate investment for a potential investor. The CMA shall also not be liable for any damage or loss resulting from reliance placed on the document.

Qatar This document has not been, and will not be, registered with or reviewed or approved by the Qatar Financial Markets Authority, the Qatar Financial Centre Regulatory Authority or Qatar Central Bank and may not be publicly distributed. It is not for general circulation in the State of Qatar and may not be reproduced or used for any other purpose.

Saudi Arabia: The Capital Market Authority does not make any representation as to the accuracy or completeness of this document, and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this document. If you do not understand the contents of this document you should consult an authorised financial adviser.

The CMA does not make any representation as to the accuracy or completeness of these materials, and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of these materials. If you do not understand the contents of these materials, you should consult an authorised financial adviser.

United Arab Emirates: This document has not been approved by, or filed with the Central Bank of the United Arab Emirates or the Securities and Commodities Authority. If you do not understand the contents of this document, you should consult with a financial advisor.

Israel: This document has not been, and will not be, registered with or reviewed or approved by the Israel Securities Authority (ISA”). It is not for general circulation in Israel and may not be reproduced or used for any other purpose. Goldman Sachs Asset Management International is not licensed to provide investment advisory or management services in Israel.

Jordan: The document has not been presented to, or approved by, the Jordanian Securities Commission or the Board for Regulating Transactions in Foreign Exchanges.

Colombia: Esta presentación no tiene el propósito o el efecto de iniciar, directa o indirectamente, la adquisición de un producto a prestación de un servicio por parte de Goldman Sachs Asset Management a residentes colombianos. Los productos y/o servicios de Goldman Sachs Asset Management no podrán ser ofrecidos ni promocionados en Colombia o a residentes Colombianos a menos que dicha oferta y promoción se lleve a cabo en cumplimiento del Decreto 2555 de 2010 y las otras reglas y regulaciones aplicables en materia de promoción de productos y/o servicios financieros y /o del mercado de valores en Colombia o a residentes colombianos. Al recibir esta presentación, y en caso que se decida contactar a Goldman Sachs Asset Management, cada destinatario residente en Colombia reconoce y acepta que ha contactado a Goldman Sachs Asset Management por su propia iniciativa y no como resultado de cualquier promoción o publicidad por parte de Goldman Sachs Asset Management o cualquiera de sus agentes o representantes. Los residentes colombianos reconocen que (1) la recepción de esta presentación no constituye una solicitud de los productos y/o servicios de Goldman Sachs Asset Management, y (2) que no están recibiendo ninguna oferta o promoción directa o indirecta de productos y/o servicios financieros y/o del mercado de valores por parte de Goldman Sachs Asset Management.

Esta presentación es estrictamente privada y confidencial, y no podrá ser reproducida o utilizada para cualquier propósito diferente a la evaluación de una inversión potencial en los productos de Goldman Sachs Asset Management o la contratación de sus servicios por parte del destinatario de esta presentación, no podrá ser proporcionada a una persona diferente del destinatario de esta presentación.

Date of First Use: December 15, 2022  298110-OTU-1702784

Please enter your email address to continue reading.

Confirm Your Access

An email has been sent to you to verify ownership of your email address.

Please verify the link in the email by clicking the confirmation button. Once completed, you will gain instant access to our insights.

If you did not receive the email from us please check your spam folder or try again.