India’s digital economy primed to unlock a $1trillion opportunity

Business Tuesday 05/October/2021 15:54 PM
By: Times News Service
India’s digital economy primed to unlock a $1trillion opportunity
Gaurav Sharma, Head of Private Equity, Investcorp India

Muscat: India’s demographic advantage and its rising incomes, strongly positions the country to be the world’s fastest-growing digital economy – unlocking $1 trillion in value (up from approximately $250 billion in 2020), and accounting for over 25 per cent of India’s overall GDP by 2025.

Investcorp, a global investment manager, specialising in alternative investments, on Tuesday outlined the growth and investment opportunities in India’s digital economy driven by digitalisation and accelerated by COVID-19 in its newly released white paper, 'Digital India The $1 trillion Opportunity'.

The white paper provides an overview of how India is poised to become a digital-first economy, how the country has evolved its digital landscape, and reasons for increased investment interest, despite the pandemic. It also analyses the factors that should propel this transformation and the opportunity for investors.

Gaurav Sharma, Head of Private Equity, Investcorp India said, “The global pandemic and the subsequent lockdown accelerated digitisation in India.  Investors continue to realise the opportunity in India over the next five years, driven by strong digital infrastructure, continued business innovation and strong investor appetite. With rapidly adopted digitalisation, India has made tech-enabled businesses not a choice, but a ubiquitous reality.”

The whitepaper notes that with continued interest in India’s tech business models, the country is witnessing 15 new unicorns added in H1-2021 alone, with these players raising an aggregate of $6 billion at a combined valuation of $28 billion. Furthermore, the investment ecosystem is now seeing strong public investor appetite as the first IPO of a digital-first Indian unicorn- Zomato was 38x oversubscribed and saw a 53 per cent pop on a listing day to touch a market capitalisation of $13 billion.

It concludes that investors will need a combination of deep networks, local on-ground presence, technology expertise and multi-cycle/stage investment experience to capitalise on this value creation opportunity.

In India, Investcorp has invested across the consumer tech, healthcare, financial services, retail, SaaS, e-commerce, and technology sectors. Its investments over the last four years include Intergrow Brands,, Freshtohome, Zolo, InCred, Citykart, ASG, NephroPlus, Unilog, XpressBees, and Safari Industries.