Top 4 Sectors for Private Capital in 2024

Private capital in India didn’t get allocated evenly in 2024. A sharp concentration of funding emerged across four sectors: real estate & infrastructure, IT/ITeS, financial services, and healthcare. Together, they dominated both deal value and volume, reflecting investors’ focus on defensible cash flows, scalable platforms, and visible exits.

These sectors accounted for the majority of India’s $43B in PE-VC investments in 2024, as per Bain’s report, with each offering clarity on growth fundamentals and exit potential. Investors leaned toward platforms with resilient unit economics, strong compliance visibility, and relevance to India’s consumption and infrastructure cycles.

Real estate and infra dominated deal value

The real estate and infrastructure bucket was the largest sector by PE-VC funding in 2024, marking a ~70% increase over the prior year, led by the $2.2B ATC India megadeal and significant investments in road infrastructure projects. Residential real estate also saw renewed interest in 2024, particularly in the luxury segment. Deal activity in the residential category surged nearly 4x to $1.1B, buoyed by a sharp rise in premium housing demand, with luxury housing increasing from 16% of total sales in 2018 to 34% in 2023 across India’s top eight cities.

The combination of end-user demand, improved balance sheets of developers, and rising affordability, especially in Tier I and II cities, has created a more investable housing market.

Meanwhile, the infrastructure segment continues to benefit from public-private partnerships and government capex. Road, energy, and telecom assets remain core areas of deployment for long-hold capital, particularly among sovereign and pension investors seeking annuity-linked returns.

IT/ITeS surged 4x

The IT sector had its strongest year in recent memory, with deal value growing ~4x. Large buyouts led the wave: Perficient ($3B), Altimetrik ($900M), and GeBBS ($865M) accounted for 80% of the total deal value. Revenue cycle management (RCM) companies like Infinx and Vee also attracted capital, thanks to resilient demand and offshoring tailwinds.

Despite rising interest in generative AI, investors continued to back operationally complex segments like revenue cycle management (RCM), where manual processes and domain expertise remain critical.

This speaks to a broader investor preference for execution-heavy platforms over speculative tech bets. Buyers are backing businesses where control translates into meaningful EBITDA improvement and scalable delivery.

Financial services grew 25%

NBFCs focused on affordable housing finance, micro-LAP, and MSME lending drove deal activity. Shriram Housing Finance ($557M), Aavas Financiers ($408M), and DMI Finance ($334M) were among the year’s largest transactions.

This growth came on the back of better RoA profiles, strong Tier II/III demand, and supportive policy, including tax rebates and enhanced credit guarantees in the FY25 budget. Insurance deal volume doubled, aided by regulatory changes that made it easier for PE funds to invest directly.

What set financial services apart in 2024 was the maturity of its platforms. Investors targeted assets with existing distribution, digital rails, and demonstrated credit performance. The sector’s asset quality and underwriting discipline, especially in housing and MSME finance, attracted long-duration capital.

The sharp rise in insurance deal activity also reflects India’s demographic tailwinds. With insurance penetration still low relative to global benchmarks, institutional investors are taking early bets on scale-up models in health, life, and general insurance.

Healthcare deal volume jumped 80%

The sector saw action across medtech (Healthium, Appasamy), providers (Baby Memorial, Apollo 247), and CDMOs (Maiva, Orbicular). Notably, 83% of provider deals in 2024 were in sub-500 crore assets, up from 57% the year prior, signaling deeper market penetration and comfort with smaller platforms.

India’s healthcare ecosystem is also poised to become a medtech export hub, with diagnostic imaging, orthopedics, and consumables expected to drive $7-$8B in medtech exports by 2030.

This surge is rooted in both public and private drivers. On one side, India’s post-Covid healthcare spending remains elevated; on the other, the sector now boasts more PE-backed platforms, with cleaner governance, scalable supply chains, and growing B2B export revenues.

Provider deals, in particular, benefited from investors’ increasing comfort with fragmented assets, roll-up strategies, and the growing appeal of single-specialty hospital chains. These focused models, whether in oncology, mother-and-child care, or orthopedics, offer capital-efficient scale, higher margins, and replicable operational playbooks. CDMOs and medtech players also saw capital on the back of global supply chain realignments and regulatory wins.

Together, these four sectors, real estate, IT, financial services, and healthcare, accounted for the lion’s share of private capital deployment in 2024.

What unites them is not just scale, but investability through strong fundamentals, regulatory support, and clear paths to value creation or exit.

As India’s private market deepens, capital is flowing toward platforms with operating leverage, sectoral tailwinds, and resilience through macro cycles.

This also reflects where LP and GP interests are best aligned. These are sectors with multiple entry points (through buyouts, growth capital, or structured secondaries) and a range of exit channels, including IPOs, block trades, and sponsor-to-sponsor deals.

Importantly, these sectors also anchor the shift toward institutionalization in India’s private capital ecosystem. They allow GPs to build platforms and deploy larger sums in repeatable, thematic strategies.

The choices investors made in 2024 offer a preview of what’s to come and where capital is likely to consolidate in the coming years.

For founders and fund managers alike, the message is clear: if the sector fundamentals are sound, capital is available.

Track the trends shaping that deployment in Deep Tech Takes Center Stage in India, India’s Healthcare Spending Is Skyrocketing, and Macro Memo – May.

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