Private equity and venture capital firms have enjoyed a lucrative wave of exits via IPOs in 2023, raking in a total of ₹10,007 crore. This development follows a series of block deals involving stakes in prominent companies such as Delhivery, Zomato, and Paytm. A recent report by IVCA-E&Y revealed that open market exits accounted for 57% of all exits by value in August, indicating a growing maturity in the ecosystem.
An analysis of IPO market activity in 2023 showed that a staggering ₹40,773 crore was raised through 46 mainboard public offers, with approximately half of this amount attributed to offers-for-sale by promoters and existing investors. Notably, private equity and venture capital players secured ₹10,007 crore across 17 IPOs via offers-for-sale, as reported by Primedatabase. The year’s largest IPO of Mankind Pharma witnessed a substantial PE/VC exit of ₹3,244 crore, while Concord Biotech, R R Kabel, Honasa Consumer, and Tata Technologies also saw significant sell-offs.
The ongoing excitement surrounding IPOs as an exit route has been lauded by PE and VC investors, with the revival of the IPO market being particularly good news for them. The current market conditions, including the performance of tech stocks, have been described as favorable by industry experts.
Furthermore, an uptick in block deals by large PE/VC investors has been observed in recent months, with notable exits from Softbank, Tiger Global, Bain, and TPG in companies like PB Fintech, Delhivery, Zomato, and Paytm. The outcomes of these developments were reflected in the IVCA-EY monthly PE/VC roundup, which reported exits totaling $4.3 billion in August 2023, with open market exits accounting for 57% of all exits by value.
Experts have interpreted the increased action in primary and secondary markets as a sign of maturity in the VC ecosystem. Looking ahead, it is projected that as many as 30 unicorns valued at over $1 billion will become IPO-ready in the coming year. For smaller startups, the SME listing route offers an early-stage opportunity to enter the markets. Additionally, the discipline of being a part of the listed universe is expected to help companies transition towards profitability and deliver gains for PE/VC investors planning their exit strategies.
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