Author: niveshaay@gmail.com

Obesity in India: A Growing Concern

This sharp surge in obesity isn’t just a public health concern—it’s reshaping how we approach wellness, nutrition, and chronic disease management. Traditional methods like diet and exercise, while crucial, are often not enough in the face of lifestyle shifts, genetic predispositions, and metabolic challenges. As doctors and patients seek more effective, long-term solutions, science is stepping in with innovative answers. And that’s where the spotlight shifts to a promising new frontier in obesity treatment: Pharmaceutical Intervention.

The Rise of GLP-1 Drugs: A Game-Changer

Enters GLP-1 receptor agonists—the revolutionary class of drugs that are changing the way we tackle diabetes and obesity. Initially developed to help Type 2 diabetes patients manage blood sugar levels, these drugs have demonstrated extraordinary potential in weight loss, cardiovascular health, and other emerging therapeutic areas. With obesity and diabetes cases soaring worldwide, demand for GLP-1 drugs has skyrocketed. Let’s break down why these drugs are making waves.

What Makes GLP-1 Drugs So Effective?

Market Landscape and Growth Trends

Global Market Trends

Globally, the GLP-1 receptor agonist market is experiencing robust growth, with a valuation of USD53.46 billion in 2024. Forecasts predict a CAGR of 17.46% from 2025 to 2030, with an expected market value of USD120.91 billion by 2030.

Industry developments include AbbVie’s USD2.23 billion deal with Gubra A/S to develop an amylin-targeting obesity drug, and Eli Lilly’s strategic price reduction for its weight-loss drug Zepbound to maintain market share.

India’s GLP-1 Market

India’s GLP-1 receptor agonist market is expanding rapidly, driven by the rising incidence of obesity and diabetes. In 2023, the Indian GLP-1 market was valued at USD 105.7 million and is projected to grow at a CAGR of 27.5%, reaching approximately USD 578.9 million by 2030.

The Changing Consumer Trends: Why Is Everyone Talking About GLP-1 Drugs?

If you’ve noticed more people discussing weight-loss injections, you’re not alone. The demand for GLP-1 drugs is surging, particularly among non-diabetic individuals looking for effective weight-loss solutions. In the U.S., prescriptions for these drugs among obese patients jumped from 21,000 in 2019 to 174,000 in 2023! Even more fascinating, young adults are embracing these medications at an astonishing 600% higher rate than in 2020.

Surprising fact: A study of 2 million Type 2 diabetes patients found that GLP-1 drug users had a lower risk of developing 42 different health conditions, including Alzheimer’s disease! Additionally, people using these drugs cut their grocery spending by 6% within six months, as they consume fewer ultra-processed foods.

API and Formulations

• Neuland is actively developing APIs for GLP-1 receptor agonists. They are working on Tirzepatide, a dual GIP and GLP-1 receptor agonist, which enhances insulin secretion and reduces glucagon levels in a glucose-dependent manner.
• Sun Pharma is developing Utreglutide, a GLP-1 receptor agonist intended for weight loss and type 2 diabetes treatment, with plans for market introduction in the coming years.
• Dr. Reddy’s is a prominent producer of Liraglutide API, a GLP-1 receptor agonist. The company holds regulatory approvals such as USDMF and EUDMF for this product.
• Biocon is preparing to launch its generic version of Novo Nordisk’s Saxenda (Liraglutide) in the UK by November.

Fill finish and distribution
OneSource has expanded its capacity to produce GLP-1 drug-device combinations. Their services encompass cartridge filling, assembly, and fill-finish processes.

Companies Poised to Benefit

Several pharmaceutical companies are well-positioned to benefit from the GLP-1 market expansion. Sun Pharma is investing in both branded and generic GLP-1 drugs, while Dr. Reddy’s (DRRD) has built a strong pipeline of GLP-1 generics, including Ozempic and Rybelsus. Natco Pharma is expected to be one of the first entrants into the semaglutide generics market by March 2026, while Cipla is working on innovative oral GLP-1 formulations that could revolutionize the market. Shaily Engineering is scaling up injector pen production to meet the rising demand for GLP-1 drug delivery devices.

Challenges and Side Effects: The Other Side of the Story

Despite their efficacy, GLP-1 receptor agonists pose potential challenges and side effects that may impact adoption. Gastrointestinal issues such as nausea, vomiting, diarrhoea, and constipation is common among users. Some individuals have experienced gallbladder problems, including an increased risk of gallstones. Although rare, cases of pancreatitis (inflammation of the pancreas) have been reported. Additionally, some patients undergoing rapid weight loss with GLP-1 drugs have shown signs of muscle and bone loss, necessitating further research into long-term effects. Long term effects are not known as it is only being used since past 5-6 years.

Future Market Insights and Trends  

The future of the GLP-1 drug market is driven by key trends, including patent expirations, manufacturing challenges, and advancements in drug delivery. Patent expires in India, Canada, and Brazil by 2026, followed by U.S. market entry in 2031-32, will open opportunities for generics, increasing competition and affordability. The introduction of oral GLP-1 formulations is expected to further drive market expansion by offering a more convenient alternative to injectables. Additionally, the growing demand for GLP-1 drug delivery devices, such as injectors and pens, is prompting companies like Shaily Engineering to scale up production of GLP-1 pen, with a roadmap to enhance capacity from 35 million to 100 million over 3-5 years.

As India strides forward in healthcare innovation, the rise of GLP-1 drugs marks more than just a medical breakthrough—it signifies a societal shift in how we tackle chronic diseases. With an increasing burden of diabetes and obesity, these drugs have the potential to reshape public health policies, redefine preventive care, and alter the economic landscape of the pharmaceutical industry. From boardroom discussions in pharma companies to kitchen-table conversations in Indian households, GLP-1 drugs are not just changing prescriptions—they are changing perspectives. As we navigate this transformation, one thing is clear: the future of metabolic health is being rewritten, and India has a front-row seat in shaping its destiny.

Geospatial computing is transforming how we analyze and interact with spatial data, driving innovations across industries through advanced technologies like AI, IoT, and cloud services.  

What is Geospatial Computing? 

Geospatial computing is the science and technology of acquiring, analyzing, visualizing, and managing geographic information. It’s about understanding the “where” and using that knowledge to solve complex problems. This involves a synergy of technologies: 

• Satellite Imagery: Capturing Earth’s surface from space. 

• GPS (Global Positioning System): Determining precise locations. 

• GIS (Geographic Information Systems): Platforms for managing and analyzing spatial data. 

• Sensors: Devices that collect location-specific data. 

These components integrate to create detailed digital representations of physical spaces, from sprawling urban centers to remote natural landscapes. Geospatial computing is not just about maps; it’s about unlocking insights hidden within location data. 

The field of spatial computing, a subset of geospatial computing, is gaining prominence. Technologies like Apple’s Vision Pro and Meta Quest are bringing spatial computing to the forefront, demonstrating a significant shift in how we interact with digital information and the physical world. This surge in spatial computing is creating new avenues for partnerships and growth for companies specializing in geospatial solutions.

Geospatial Industry Value Chain

(Source- GW CONSULTING REPORT)

The Geospatial Industry Value Chain represents the various processes and technologies involved in capturing, processing, analyzing, and disseminating geospatial data.

Key Components of the Value Chain:

• Scanning Tools and Technologies: These tools are used to collect geospatial data from various sources, such as satellites, drones, aircraft, and ground-based sensors. Examples include LiDAR, radar, ground-penetrating radar, and electromagnetic positioning systems.
• GNSS and Positioning: This component refers to the Global Navigation Satellite System (GNSS), which provides accurate positioning information. GNSS systems like GPS are used in a wide range of applications, from navigation to surveying and mapping.
• Earth Observation: This component encompasses technologies like satellites and drones that are used to capture images and data of the Earth’s surface. These data are then used for a variety of purposes, such as monitoring environmental changes, disaster management, and urban planning.
• Data Processing and Analysis: This component involves cleaning, processing, and analyzing geospatial data to extract meaningful insights. This may involve using Geographic Information Systems (GIS) software, as well as other advanced technologies such as artificial intelligence and machine learning.
• Workflow Integration: This component focuses on integrating the various processes and technologies in the value chain to create a seamless workflow. This can be achieved through the use of workflow management software and other tools.
• Sectoral Applications: This component highlights the various sectors that benefit from geospatial technologies. These sectors include telecommunications, urban planning, disaster mitigation, infrastructure construction, natural resource management, asset management, navigation, and agricultural applications.
• Dissemination: This component refers to the process of sharing geospatial data and information with end users. This can be done through a variety of channels, such as social media, web platforms, and enterprise applications.

Why Geospatial Computing Matters Now?

1) Exponential Industry Growth

2) Avoiding Costly Errors

• Example: Mumbai’s Andheri bridge misalignment could have been prevented with geospatial planning tools.

3) Government Vision and Policy support

• India aims to create a complete 3D map of the country by 2030, enabling smarter infrastructure and environmental management.
• Goals as mentioned under the National Geospatial Mission, 2022:

4) Geospatial Technology in Action: Indian Case Studies

India is leveraging geospatial technology to address a variety of challenges and drive development:

4.1 Agriculture

• eNAM (Electronic National Agriculture Market): This initiative integrates GIS and IoT to optimize crop prices and supply chains, benefiting farmers and consumers.  
• Other applications include the Kisan Portal, Soil Health Card Scheme, and PM Kisan Samman Nidhi Yojana, which utilize geospatial data for agricultural planning and management.  

4.2 Governance

• SVAMITVA Scheme: This scheme uses drones to map rural properties, helping to resolve land disputes and provide clear property ownership records.  
• Geospatial technology is also used in e-District Services, e-Registration of Property, and Online Mutation of land records.  

4.3 Healthcare

• eSanjeevani: This telemedicine service leverages location data to connect patients with healthcare providers, improving access to medical care, especially in remote areas.  
• Other applications include the National Digital Health Mission (NDHM) and Ayushman Bharat Digital Mission (ABDM), which utilize geospatial data for healthcare planning and delivery.  

4.4 Environment

• Namami Gange Program: This program uses geospatial sensors and analytics to monitor pollution levels in the Ganges River, supporting efforts to clean and rejuvenate this vital waterway.  
• Geospatial technologies also support Digital Forest Health Monitoring Systems and Carbon Credit Project Registration.  
  

Geospatial Applications in National Mission Programs

Industry Players

Let’s break down the key differences between Genesys, Ceinsys, and MapmyIndia. This comparison will give you a clear understanding of their business models, focus areas, and how they operate within the geospatial industry. By analyzing these distinctions, you’ll gain valuable insights into the sector and the role each company plays in shaping its future.

The Road Ahead: Trends and Future Outlook

The future of geospatial computing is dynamic, with several key trends shaping its trajectory:

Consumer Technology Integration

• The integration of geospatial technologies into consumer products like Apple Vision Pro and Meta Quest is expanding the reach and applications of spatial computing, bringing its benefits to a wider audience.  

Private Sector Expansion

• The increasing involvement of the private sector in developing geospatial solutions for various industries, including logistics, retail, and more, is driving innovation and creating new market opportunities.  

India as a Geospatial Talent Hub

• India is emerging as a key hub for geospatial talent, with companies like Trimble establishing major offices in the country, reflecting confidence in India’s skilled workforce and the sector’s growth potential.  

Conclusion

Geospatial computing is a transformative force, reshaping how we understand and interact with the world. From preventing infrastructure failures to improving access to healthcare and enabling sustainable environmental management, its applications are vast and impactful. As technologies continue to advance and the private sector plays a greater role, geospatial computing is poised for continued growth and innovation, promising a future where location intelligence drives smarter decisions and a better world.

The Union Budget 2025 reflects the government’s commitment to balancing fiscal discipline with growth-oriented reforms to support India’s economic development amid global uncertainties. With a projected GDP growth of 6.3– 6.8% for FY26 and a fiscal deficit target of 4.4% (down from 4.8%), the budget strikes a prudent balance between fiscal consolidation and economic expansion.

The budget strongly emphasizes boosting domestic consumption through targeted measures aimed at enhancing disposable income, stimulating demand, and driving economic activity. This is evident through income tax relief for the middle class, encouraging higher spending, and initiatives like the modified UDAN scheme to improve regional connectivity and tourism.

The government plans to forgo Rs. 1 lakh crore in direct taxes and Rs. 2,600 crores in indirect taxes due to various tax breaks. Despite this, the finance minister expects the fiscal deficit to decrease from 4.8% to 4.4% of GDP in FY26. This is possible because the government is relying on non-tax revenue from increased dividends from public sector companies and banks, which are expected to rise by 10%. Additionally, even with lower direct taxes, increased consumer spending will likely boost GST collections. Since companies are not receiving tax relief but are expected to benefit from higher demand, corporate tax revenue is projected to grow by 10%, reaching Rs. 10.8 lakh crore for FY26.

Key Budget Announcements Across Sectors

In the current budget, the government’s capital expenditure (capex) for FY 2024- 25 was initially targeted at Rs. 11.11 lakh crore, but the actual capex stands at Rs.10.18 lakh crore, reflecting a more conservative spending approach amid fiscal constraints. This shortfall highlights cautious expenditure driven by revenue pressures from lower tax collections and non-tax receipts. As a result of these fiscal pressures, the capex for the next fiscal year (FY 2025-26) is projected at Rs. 11.21 lakh crore, indicating moderate growth with a continued focus on fiscal prudence. To maintain fiscal discipline while supporting growth, the government is prioritizing investments in critical sectors like infrastructure, energy, and healthcare.

Key allocations in the budget highlight the government’s focus on critical sectors:

• Defence spending saw an 8.1% increase, rising from Rs. 4.55 to Rs. 4.91 lakhs crore, driven by modernization efforts and strengthening border security amid rising geopolitical tensions.
• The budgetary allocation for Indian Railways has remained stagnant at Rs. 2.55 lakh crore mirroring the allocation from the previous fiscal year (FY25), against expectations that the sector would get an investment boost in Union Budget 2025-26.
• The major announcement in the water sector is the extension of the Jal Jeevan Mission (JJM) till 2028. Originally set to be completed by 2024, the mission has been extended as around 20% of rural households still lack tap water connections. This aligns with the government’s goal of achieving 100% tap water coverage for all rural households, ensuring safe and reliable drinking water for every home.
• The government has introduced mining reforms to improve production efficiency, encourage private sector participation, and develop critical mineral resources vital for the green economy.
• This budget emphasizes leveraging advanced technologies for economic growth and modernization. A National Geospatial Mission will build foundational geospatial infrastructure and data, improving governance and planning. For the first time, AI is highlighted, with a Centre of Excellence in AI for Education receiving Rs. 500 crore to advance AI-driven learning and research.

Power and Renewable

Energy: Green Growth Strategy

While higher solar cell duties may affect module makers’ margins, it aims to reduce imports and strengthen local manufacturing.

The budget aims to develop atleast 100 GW of nuclear energy by 2047, allocating Rs. 20,000 crore for a new Nuclear Energy Mission focused on small modular reactors, marking a key step in advancing India’s nuclear energy capabilities and supporting the energy transition.

Minerals Development

In a significant move to boost the availability of critical minerals essential for India’s clean energy transition, the finance minister eliminated customs duties—previously at 10%, 5%, and 2.5%—on waste and scrap of key minerals like antimony, beryllium, bismuth, cobalt, cadmium, molybdenum, rhenium, tantalum, tin, tungsten, zirconium, and copper.

Waste and scrap of lithium-ion batteries, cobalt powder, lead, and zinc, which were previously subject to a 5% duty, have also been fully exempted.

This follows Sitharaman’s July 2024 Budget announcement to exempt basic customs duty on 25 critical minerals unavailable domestically and to reduce duties on two others, aimed at encouraging their processing, particularly by micro, small, and medium enterprises. These measures would secure raw material availability for domestic manufacturing and create employment opportunities for Indian youth.

Consumption and Economic Revival

The Union Budget 2025 marks a pivotal shift in India’s economic policy, with more focus on a consumption-driven growth model. Instead of relying solely on capital-intensive investments, the government is channeling resources toward stimulating domestic demand and consumer spending. A landmark move in this direction is the extension of the tax-free threshold to Rs 12.75 lakh for individual salaried taxpayers under the new tax regime, injecting Rs 1 trillion into middle-class households and significantly boosting disposable income to invigorate the marketplace.

Supporting this consumption-led growth, the modified UDAN scheme aims to connect 120 new destinations and carry 4 crore passengers over the next decade, enhancing regional connectivity and indirectly stimulating sectors like hospitality, retail, and local businesses. Additionally, the development of 50 key tourist destinations is set to drive domestic tourism, creating employment opportunities and fostering economic activity in related sectors.

The budget promotes consumerism while encouraging responsible financial behavior. Rising per capita income is set to drive India’s consumption growth, while also fostering a culture of savings and investments. This balanced approach will benefit the wealth management sector, poised for growth with an expanding retail investor base and high-net-worth individuals, helping maximize financial potential in India’s evolving economy.

Manufacturing Renaissance & Export focus

This budget demonstrates a strong government focus on boosting exports. A multi-pronged approach aims to streamline export processes and enhance competitiveness. The Export Promotion Mission, with sectoral targets, will facilitate easier access to export credit, cross-border factoring support, and assistance for MSMEs navigating overseas market challenges.

‘BharatTradeNet’ (BTN), a new digital platform, will unify trade documentation and financing solutions, supporting integration with global supply chains. A National Framework for GCCs (Global Capability Centres) will guide states in promoting these centers in tier 2 cities, potentially creating new export opportunities. Finally, upgraded air cargo warehousing, especially for perishable goods, will address logistical bottlenecks and facilitate their export.

Electronics Industry

Further, it was also announced that the government will support the domestic electronic equipment industry in leveraging the opportunities related to Industry 4.0.

Crucially, substantial funding increases for the Ministry of Electronics and Information Technology (MeitY), including a near doubling of the allocation for semiconductor development, and a 55% rise in overall PLI scheme funding to Rs 9,000 crore, directly support and strengthen domestic electronics and semiconductor manufacturing.

Textiles, Pharma and Others

The duty on shuttle-less looms has been eliminated, promoting domestic production of geotextiles, Agro-textiles, and medical textiles, reflecting the government’s goal to enhance technical textile output.

Similarly, the reduction in duties on pharmaceutical ingredients aims to boost domestic manufacturing in the pharma sector. Beyond these, the budget also promotes local toy manufacturing and includes various other announcements aimed at bolstering the manufacturing sector, collectively aiming to enhance India’s manufacturing capabilities and self- reliance.  

Part B- Direct Tax

The Union Budget 2025 takes a significant step toward tax simplification and easing the financial burden on taxpayers. By increasing the income tax exemption limit to Rs. 12 lakh, the government is providing substantial relief to the middle class, which will not only boost savings and investments but also lead to higher disposable income, driving increased consumer spending.

• Nil tax slab will apply for annual income up to Rs 12 lakh (Rs 12.75 lakh for salaried tax payers with standard deduction of Rs 75,000) under the new tax regime.
• There are no changes in Old Tax Regime
• Income liable to Special Rates of Tax would be taxable even if Total Income is below RS. 12 Lacs.
• Rebate U/s. 87A is allowed only on Normal Income and not Special Income like STCG/LTCG etc.

New Income Tax Bill would be tabled in Parliament in this Budget Session. This is proposed to replace existing Income Tax Act, 1961.

Conclusion: Strategic Growth with Fiscal Prudence

The Union Budget 2025-26 strikes a balance between growth aspirations and fiscal discipline. For investors, the focus on capex, renewable energy, domestic manufacturing, and tax reforms creates a dynamic landscape of opportunities across sectors. As India charts its path towards a $10 trillion economy, strategic investments aligned with government priorities can unlock significant value.

Budget 2025 thus reflects a strategic balance, shifting from an infrastructure- centric approach to a model that leverages consumption and responsible investments to drive sustainable economic growth and long-term prosperity.

As 2024 comes to a close, we pause to reflect on a year filled with valuable lessons. It has been a year marked by challenges, milestones, and achievements that have reinforced the values we stand for at Niveshaay and the vision that drives us forward.

Looking ahead to the new year, we also take time to remember where it all began. Niveshaay’s story started in 2014 with a small, dedicated team united by a shared passion for uncovering hidden businesses. Through our deep-dive research into under-researched companies, we laid the foundation for Niveshaay’s unique identity.

Gradually as Niveshaay evolved, so did our vision. One of our core visions has always been to back entrepreneurs—the true heroes of our economy. What once seemed like a distant dream has come closer, guided by persistence, faith, and the unwavering support of our investors. We launched the Niveshaay Hedgehogs Fund (Category III AIF) and the Niveshaay Sambhav Fund (Category II AIF) this year. These vehicles provide us with the flexibility and structure to leverage the business relationships that have been cultivated over the years, further aligning with our philosophy of “thinking the entrepreneur way.” 

This year also marked the beginning of a new tradition. We hosted our first meet-and-greet session with our investors and entrepreneurs, The Dhandho Valley by Niveshaay, in Surat—the city where it all began. Known for its entrepreneurial spirit, Surat has always been close to our hearts. The event celebrated entrepreneurship, bringing together marquee investors, industry leaders, and entrepreneurs to reflect on the synergies between investing and building businesses. With our Niveshaay family growing—both in team size and vision—we also inaugurated our new office space during The Dhandho Valley event. 

Additionally, this year marks our five-year journey on the Smallcase platform, where we’ve built a thriving community of investors. This achievement has been truly remarkable, enabling us to connect with investors across India and bring them together through our meet-and-greet sessions.

As we step into 2025, we are excited about India’s growth story. Opportunities abound in sectors like energy transition, power transmission, recycling, electronics manufacturing services (EMS), geospatial technologies, and data centres—areas we believe will lead the next decade of economic transformation.

This journey wouldn’t have been possible without our investors, partners, mentors, and well-wishers.

Thank you for being an integral part of our story. As we look forward to 2025, we do so with gratitude, hope, and determination to build on the foundation we’ve created together.

Wishing you and your families a joyful and prosperous New Year!

ARCHIVES

•  A glimpse into our ‘Meet and Greet’ events

• Team Niveshaay

“The rich get richer, not by hoarding their wealth, but by investing in opportunities that create more wealth.”~ A Smart Investor

Many amongst the smart population seem to have identified this occasion way ahead of most economists, and their actions suggest that they have already started minting wealth from this emerging golden scenario.

In this economic backdrop, one such popular asset class that offers strong wealth-creation opportunities is the Private Equity Market. Private markets in India have been growing and this growth is being led by higher inflows from the wealthy population.

In this blog, we will be highlighting the key factors driving the Indian private equity markets and why is it being preferred over traditional asset classes –

Firstly, what are Private Equity (PE) investments?

Private Equity (PE) is a form of investment where funds are directly invested into private companies. This type of investment is usually conducted by private equity firms, venture capital firms, or angel investors.

Certain key Characteristics of Private Equity investments are:

• Private Ownership: Private equity investments are typically made in companies that are not publicly traded. These companies are either privately held or taken private through buyouts.
• Different types of PE Investments:
  – Venture Capital (VC): Investments in early-stage companies with high growth potential.
  – Growth Capital: Investments in more mature companies looking for capital to expand or restructure.
  – Buyouts: Acquiring a significant portion or the entirety of a company. Leveraged buyouts (LBOs) are common, where the acquisition is financed largely through debt.
• Investment Horizon: PE investments usually have a long-term horizon. The goal is to improve the company’s value and eventually exit through a sale, IPO, or another form of exit strategy.
• Active Management: Private equity firms often take a hands-on approach, involving themselves in the strategic direction and operations of the companies they invest in to enhance value. The fund managers play a crucial role in this part.

How Private Equity Works?

1. Fundraising: PE firms raise capital from institutional investors, high-net-worth individuals, and other sources to create a private equity fund. These investors are usually “Limited Partners” in the PE Fund.
2. Investment: The fund managers identify and invest in companies with potential for growth or improvement. This involves detailed due diligence to assess the viability and potential of the target companies.
3. Management and Growth: The PE firm works closely with the management of the portfolio companies to implement strategic improvements, operational efficiencies, and growth initiatives.
4. Exit: After several years, the PE firm exits the investment, ideally at a higher valuation, providing returns to its investors.

Benefits and Risks

Benefits:

1. Potential for high returns: PE investments can yield substantial returns if the target companies perform well.
2. Value creation: PE firms often improve the operations and profitability of the companies they invest in.
3. Diversification: Provides an alternative investment vehicle outside of public markets.

Risks:

1. Illiquidity: Investments are typically locked in for a long period of time.
2. High risk: The success of investments can be highly variable, and there’s a chance of losing the invested capital.
3. Complexity: Requires significant due diligence and active management.

Why exit is so important & Why do need a fund manager for exit?

• Illiquidity: Due to the illiquid nature of these investments, it is often difficult to convert equity stakes into cash in such investments. The fund managers play an important role in curating a favorable exit strategy that can generate maximum returns for the Limited Partners.
• Due Diligence: These investments require significant due diligence and regulatory procedures before any exit can be made. This is why planning an appropriate exit strategy that duly meets the investor’s expectations is important.

What’s Driving PE in India?

Some Key factors driving the growth of PE market in India are:

• Valuation concerns in listed equity markets – The Indian listed markets have seen a stellar rally post the Covid pandemic. The broader market has almost tripled from COVID-19 lows and most of the listed stocks are trading at their upper range of historic valuation multiples. In such a situation, it is difficult to find new wealth-creation opportunities in the broader listed space. In such a scenario, the private markets present more lucrative opportunities for generating high returns.

• Visibility of Exit – Exit is prima facie very important while investing in the PE space, as it is a challenging task. Unlike the listed space where a secondary sale can be made with just a click of a button, PE space requires considerable effort and time to curate a lucrative exit. As explained earlier, there are 4 possible modes of exit – Buyback, Strategic Sale, Secondary sale (Sponsor to Sponsor sale), and Public Issue (IPO/OFS). The growing IPO trend coupled with rising buyouts has led to better visibility of exit thus encouraging more investors to scout opportunities in the unlisted space.

• Growing AIF investments – the AIF commitments have quadrupled in the last 5 years with maximum capital flowing into AIF Category II funds. The AIF category II funds focus on PE deals and this growing trend indicates growing investor interest in this asset class.

• Growing HNI and UHNI Population – The High Net-worth Individuals population (net worth of $1 million and above) has tripled in the last 5 years. Thereby people are scouting for alternate assets to park their excess income and private equity is emerging as a lucrative option amongst UHNI/HNI.

• China+1 Tailwind – With the focus of global players on diversifying their manufacturing base from China, India stands out to be a major beneficiary. Many global players have set up and many others are looking to set up their manufacturing base in India. The bulk of India’s manufacturing lies far from public eyes – in the private space. There are various players like Sambhav Steel, Waaree Energies, etc. which are sector leaders and innovators in their sector but since these entities are not listed it is not possible for every investor to own shares of these companies. In such a situation, PE investment firms facilitate access to such hidden opportunities which have the potential to create immense wealth in the medium/long term.

• Growing PE Ecosystem – The growing participation of investors in the PE space coupled with an increasing number of PE firms has led to the creation of a better PE ecosystem. Although this space remains highly fragmented, efforts are being made by many modern players to centralize/integrate the various aspects of this segment. The recent emergence of applications like Stockify, unlistedkart, Precize, etc. is further promoting investor education in this segment.

How can Niveshaay help you in planning your PE investments?

Niveshaay offers end-to-end fund management solutions in the PE space – right from deal origination to curating lucrative exits for our investors. We help our clients in their wealth creation journey by structuring the right mix of listed and unlisted opportunities.

Our key strength lies in our approach in the unlisted markets. Our approach allows us to identify strong entrepreneurs in industries that are witnessing healthy tailwinds.

Over the years, we have successfully structured multiple deals with industry leaders such as Waaree Energies Ltd, Sambhav Steel Pipes Ltd, Sinhal Udyog Pvt Ltd (Kimbal), XYXX Apparels Pvt Ltd, Magicrete etc.

We have recently introduced our two AIFs (Alternative Investment Funds)

1. Niveshaay Hedgehogs Fund (Category III)
   This fund primarily focuses on listed opportunities, with a smaller allocation dedicated to unlisted investments. The Hedgehogs Fund offers a balanced approach, combining the stability of listed assets with the growth potential of niche unlisted investments.
2. Niveshaay Sambhav Fund (Category II)
   The Sambhav Fund is majorly focused on unlisted opportunities, where we back exceptional founders and visionary entrepreneurs on their growth journey.

“Agrochemicals are not just products; they are catalysts for change in agriculture. They help farmers overcome challenges and contribute to our nation’s self-sufficiency and prosperity.” – Uday Kotak, Founder & CEO, Kotak Mahindra Bank

Agriculture: The Heartbeat of India’s Economy

Agriculture is not just a sector; it’s the lifeblood of India providing livelihoods for over half the population and contributes about 18% to the nation’s GDP. From the staples like rice and wheat to high-value crops like spices, fruits, and vegetables, India has not only become self-sufficient in food grains but also carved a niche for itself in the global export market.

India’s agricultural exports make a substantial impact on global food security.

• India supplies 30% of the global rice trade, feeding millions worldwide.
• India leads in spice exports, contributing 30% to the global market, essential for food flavoring and preservation.
• India exports 15% of the world’s pulses, a critical source of protein.

All these highlight India’s critical role in the global food supply chain, impacting a significant portion of the world’s population.

Shrinking Farmland and the Crucial Role of Agrochemicals

With the global population at around 8 billion, set to grow by 1.2 billion by 2030 and an additional 2 billion by 2050, which means more demand for food and protein. Despite this, food insecurity is a growing concern. Currently, about 10% of the global population, face food insecurity. If trends continue, this number could rise to between 800 million and 1 billion by 2030.

Tackling these issues will require boosting agricultural productivity, improving food distribution, and enhancing resilience to environmental challenges. However, arable land is shrinking significantly—from around half an acre per person today to less than a third by 2050. This sharp decline in available farmland underscores the urgent need to increase food production on less land. Agrochemicals become vital in this context, playing a crucial role in enhancing crop yields and ensuring global food security.

India’s Agrochemical Revolution: A Harvest of Opportunities

The Indian agrochemical industry is valued at around $7.5 billion and is projected to grow at a compound annual growth rate (CAGR) of 8-10% over the next few years. This makes it one of the largest agrochemical markets globally.

India is on the cusp of an agrochemical revolution, and there’s plenty to be excited about! As the 2^nd largest exporter of agrochemicals in the world and a top player in crop protection production, India’s agrochemical sector is set for remarkable growth. With domestic innovation picking up pace and a strong focus on manufacturing competitive post-patent products, the market is expected to expand at a healthy rate, yielding a bountiful harvest of opportunities in the agrochemical sector.

Agrochemicals might sound like a complicated term, but it’s really all about two main things: fertilizers and pesticides.

Fertilizers vs. Pesticides: What’s the Difference?

Think of fertilizers as the vitamins for plants—they give crops the nutrients they need to grow big and strong. Pesticides, on the other hand, are like the medicine—they protect crops from the bad guys like pests and diseases.

Fertilizers often rely heavily on government subsidies and face challenges with pricing power and differentiation, leading to lower margins. On the flip side, pesticide companies operate with more flexibility, often enjoying higher margins due to the unique formulations they offer.

Pesticides: The Unsung Heroes of Indian Agriculture

In India, pesticides play a vital role and come in various types based on what they target:

1. Insecticides: These are used to battle crop-damaging insects. India’s tropical climate and high production of crops like paddy, cotton, and sugarcane make insecticides a staple. Popular choices include organophosphates, carbamates, and synthetic pyrethroids.
2. Herbicides: Weeds are a big problem, and herbicides are here to save the day. They manage and eliminate weeds that compete with crops for nutrients, water, and sunlight. As labor costs rise and worker shortages increase, herbicides are becoming more popular. Common ones include glyphosate, atrazine, and 2,4-D.
3. Fungicides: These are crucial for preventing fungal diseases in crops. The shift towards cultivating fruits and vegetables, coupled with government support for exports, has boosted fungicide demand. Some commonly used fungicides are mancozeb, carbendazim, and copper oxychloride.

Paddy is the biggest consumer of agrochemicals in India, accounting for 26-28% of use, followed by cotton. Eight states—Andhra Pradesh, Maharashtra, Punjab, Madhya Pradesh, Chhattisgarh, Gujarat, Tamil Nadu, and Haryana—dominate the market, using over 70% of India’s agrochemicals, with Andhra Pradesh leading the pack.

The Pesticides Market Value Chain: From Factory to Field

The journey of a pesticide from raw material to the farmer’s field involves a complex value chain:

Why Invest in India’s Agrochemical Industry?

So, why should investors keep an eye on India’s agrochemical industry? Here’s the scoop:

• Surging Demand, Shrinking Farmland:

• Innovation and Export Potential:

• Government Focus: With significant budget allocations for agriculture and allied sectors, the government is committed to boosting productivity and promoting sustainable farming. The government is now supporting this shift with favourable schemes and awareness programs to boost agrochemical adoption.
• Favorable Environmental Conditions: Positive weather forecasts from the Indian Meteorological Department for 2024 suggest strong agricultural output, further driving demand for agrochemicals.

Challenges on the Horizon

However, the road ahead isn’t without bumps. The industry faces challenges such as:

• Slow registration processes delay product approvals, hindering market entry and innovation.
• Rising raw material costs, especially due to import dependency from China, impact margins.
• The lack of reliable contract manufacturing partners adds operational inefficiencies.
• Inconsistent safety practices during production pose risks to farmers and crops.
• Revenue remains unpredictable due to the industry’s dependency on monsoon conditions.

Looking Ahead

Despite these hurdles, there’s optimism on the horizon as raw material costs stabilize and global inventory levels adjust. In the years to come, companies that succeed will be those that strategically invest in their capabilities, especially in backward integration. Speed to market, efficient payment cycles, and strong branding will be key differentiators in this rapidly evolving landscape.

The future of India’s agrochemical industry is bright, with opportunities sprouting at every turn. As the sector continues to bloom, it’s not just about feeding India—it’s about feeding the world.

“With innovation in agrochemicals, we are not just improving crop yields but also securing the future of Indian agriculture. These advancements are crucial for feeding our growing population.” – N. R. Narayana Murthy, Co-founder, Infosys