How Covid-19 could boost investments into India
Global investments into the Indian market are likely to skyrocket post Covid-19, as the country is an ideal breeding ground for some of the sectors that are expected to win out from the crisis. This is according to KPMG partner & national leader for private equity Nitish Poddar, who spoke to the Economic Times (ET).
Poddar’s predictions come amid a general discussion on India’s private equity market under Covid-19 conditions, which he reports has been largely stable in the March quarter. This is likely the result of the fact that a number of deals that were already “in the pipeline” from the end of last year came to fruition in this quarter, according to Poddar.
Covid-19 related disruption is expected to manifest itself in the April to June quarter figures, according to Poddar. Nevertheless, he predicts that India will make a grand recovery over the course of the next financial year, due to the nature of the economy.
“With the consumption-led economy, there will be a huge amount of funding that will come to India. Scale was our problem and I think Covid-19 in a few sub-sectors will solve that problem. That is why I think there will be a far larger interest from venture capital funds investing into India,” said Poddar.
The KPMG partner points to the fact that India has a population well in excess of one billion, which has always made it a thriving consumer economy. Expert predictions in recent years have positioned India’s consumer market to surpass the $6 trillion mark by 2030, while a large share of this retail activity is moving online.
And online retail is one sector that is thriving under the Covid-19 conditions, and is expected to continue its growth in the wake of the crisis. India is well positioned for this boom, and Poddar expects some key sectors to win out in this scenario.
“I think what will be very interesting in terms of sub-sectors is health tech and med tech, which will be a very big winner. Edtech will be a very big winner. Online entertainment and gaming in India will again be a very big winner. The other theme that I believe will play out very strongly and is still at a very nascent stage is agri tech,” he explained. The financial technology sector, meanwhile, will continue its boom in India.
Poddar’s predictions for the health tech and med tech sectors are consistent with broader expert commentary on the Indian market. RedSeer Consulting recently indicated that the Covid-19 crisis could accelerate growth in India’s eHealth market, with predictions of it reaching $16 billion by 2025. Bain & Company India Managing Director Karan Singh also affirmed this boom in eHealth recently.
