 "Indian PE/VCs deliver higher returns than bourses, says Crisil report")
Indian private equity (PE) and venture capital (VC) funds have delivered higher returns than the benchmark Sensex over the past decade, shows a study by Crisil and Oister Global. As of March 2023, a gauge tracking PE/VC performance beat the Sensex by 13.5 per cent in the past 10 years.
Notably, the outperformance was not driven by a handful of funds.
“This performance is not driven by a few funds — distribution of alpha recorded by funds in the benchmark over their respective public market equivalent reveals that more than 75 per cent of the funds have generated positive alpha,” said Crisil in a note.
The country has become the third-largest ecosystem globally with more than 112,000 start-ups in existence as of October 3, 2023.
PE/VC funds largely invest in the unlisted space and early-stage companies.
“A key contributor to this success has been the PE-VC markets, which have risked capital and sown financial know-how,” said the Crisil report.
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PE/VCs have also deepened their geographical reach.
“PE/VC deal activities have gone beyond Tier 1 cities; deals in these cities have surged approximately 220 times in a decade — from Rs 318 million in fiscal 2013 to Rs 71 billion in fiscal 2023,” said the report, highlighting that the Indian start-up ecosystem is now the third-largest in the world with total recognised firms at 112,000.