Analysis of Private Equity Exit Report 2021

In the last decade, Indians have taken up business ventures to the next level, whether it’s IT or FMCG. The role of private market investors has been significant in the success of these ventures. The year 2021 was a revolutionary period for Indian startups as it has recorded the highest number of unicorns. Many investors liquidated their stake in the companies, out of which many were venture capital firms. 

PE or Private equity exit refers to the selling of a stake by the investor in the investee company. This is done by way of, secondary sale of shares, IPO or M&A. The following article provides a lucid summary of PE exits in the FY 2021-22 in layman’s language. 

PE Exits in India During 2021

Figure 1- Exit deals from 2017-21 

(Source- venture capitals: India Private Equity Exit Report-2021)

There was an exceptional surge in Private equity exit deals in 2021 compared to 2020 or 2019. Total 272 deals in 2021 amounted to a whopping amount of $38.76 billion which is 270% higher than the number recorded in 2019. The deals in 2020 were largely impacted by the covid pandemic and therefore, it amounted to a modest $6.9 billion only. Out of the deals in 2021, complete exit deals were more in comparison to partial exists. The year was lucrative for investors both in terms of investments and exit, which is a healthy sign for the private market investors. 

Top Exists by Size

The largest deal of the year 2021 was of GlobalLogic, a Noida-US-based private company, by Tokyo’s Hitachi for $9 billion. The PE companies that sold their stake were Partner’s Group and CPPP. When India’s largest fintech company, PayTM got listed in November 2021 for $1.3 billion as an Offer for Sale, investors made a partial exit. Bangalore-based Venture capital firm, BigBasket was valued at $1.8 billion post-acquisition when TATA digital Ltd. bought it from Alibaba, Abraaj Group, and Ascent Capital. The initial value pegged was $1.2 billion. Hence, investors booked profit on their investments in some of the most successful ventures in India.

PE Exists by Profitability

In 2021, many investors made exits from their investments and took back home a handsome amount of money. Info Edge sold its stake in Zomato through IPO, which earned the former 65.52 times of the initial investment. The second most profitable deal was a complete exit by clear stone on its 15 years old investment in BillDesk. An Indian cosmetic start-up, Sugar cosmetics, fetched India Quotient, 49 times the initial investment in just 7.76 years by the partial exit.  

PE Exits by Industry

The IT industry has witnessed the highest number of PE exit deals in 2019, which is 23.5% of the total PE exit deals in 2021. The amount liquidated in this sector was $23,508 million which was followed by BFSI for the amount of $5,097 million.  It is no gain saying that the IT industry has seen a spurt in growth and innovation, and therefore, people are willing to pay more than the market value. The lowest PE exit deals were in the energy sector, which was at $0.9 billion, as this is a more mature market.

PE Exits by Value and Volume

Figure2 – Share of PE Exits by the value of deals 

Source- venture capitals: India Private Equity Exit Report-2021)

Even after declining from 2018 to 2020, the IT sector held a major share in the value of deals in PE exits. In 2020, the PE exit deals were largest in the BFSI sector because of the pandemic that exhorted people to take insurance and investments along with loans as the interest rates lowered significantly. But in 2021, the largest share of value in these deals was recorded in the IT sector. This is due to the scope of further innovation and expansion in the IT sector. The potential of AI and machine learning is yet to be fully exploited. BFSI, being the second most valuable industry for PE exit, shows that this sector is promisingly growing, making people more informed about alternatives of investments and the importance of insurance after the pandemic, specifically. Therefore, PE exits in this sector grew by a modest margin in 2021.

Figure- PE exits in 2021 by volume 

Source- venture capitals: India Private Equity Exit Report-2021)

By volume, the IT industry shares 40% of the total volume of PE exit deals and has been stable during the last three years. This also showcases that volume in the manufacturing industry has been highest since 2018, indicating that deals have increased in 2021. Here, we can conclude that investors find the IT sector to be more lucrative and have better sources for getting higher returns. 

PE Exits by Type

Figure- PE exit by different alternatives during 2017-2021 

(Source- venture capitals: India Private Equity Exit Report-2021)

In 2021, there were a total of 89 deals through strategic sale routes amounting to $14.55 billion. It constituted 38% of the total value of PE exits followed by Public Market Sales and Secondary Sales that amounted to $12.13 billion and $11.03 billion. Here, we see that Buyback is the least preferred means for exit deals.

Figure- PE exits by strategic sale

(Source-venture capitals: India Private Equity Exit Report-2021)

The strategic sale or otherwise known as Strategic acquisition was the means opted by maximum 

PE firms liquidate their investment, and about 90% of such deals were complete sale of the stake in the investee company. Some significant deals through strategic acquisition were Hitachi which acquired GlobalLogic for $9 Billion, and Prosus acquired Billdesk for $4.7 billion. In contrast with 2018 data that reflect that the majority of investors partially sold their stake, investors in 2021 wanted to realize full value for their investment. 

Figure- PE exits by the secondary sale of the stake

(Source- venture capitals: India Private Equity Exit Report-2021)

Secondary sales are when a PE-VC firm is acquired by another PE-VC firm. It was the route opted by Carlyle Group to acquire Baring Asia’s stake in Hexaware Technologies for $3 billion. The data showcases that investors preferred to sell their complete stake in this type of PE exit deal too. This showcases value creation in the Indian ecosystem as this year witnessed both the largest number of start-ups and the highest number of PE exit deals.

Figure- PE exits by buyback

(Source- venture capitals: India Private Equity Exit Report-2021)

Even after being the least opted means for selling stake by PE exit firms, the buyback remains the best option when the owners of the company are confident in their performance and growth prospects. However, since 2017, the number of buyback deals has been falling from 30 deals in 2017 to 15 deals in 2021. TVS, in September 2021, bought back its shares from CDPQ due to increased growth prospects in the EV market.

Figure – PE exits by Public market 

(Source- venture capitals: India Private Equity Exit Report-2021)

Public Market Exit remains the favourite and most preferred type of PE exit d. 2021 was one of the best periods for IPOs. Out of 37 IPOs-backed PE exit deals, 25 took place after the second half of the fiscal year 2021. Zomato, One97 Communications, FSN Ecommerce (Nykaa) got listed and were oversubscribed heavily. It also witnessed a record-breaking amount realized through these IPOs that amounted to $6.1 billion.  


The above report highlights the significance of the year 2021 for the business world, especially from the viewpoint of an investor. PE exit deals were at an all-time high, and it realized the maximum value from the sale of venture capital firms. As the Indian market ecosystem has embraced start-ups wholeheartedly, investors are looking to realize their profit by selling their stake in the booming economy.