No dearth of deals in India private equity: Warburg Pincus’ Vishal Mahadevia

Even as global dealmaking faces headwinds, India continues to offer steady opportunities for private equity investors. Warburg Pincus’ managing director and head of Asia Private Equity, Vishal Mahadevia, sees no slowdown in dealmaking, despite the volatility that has made large mergers and acquisitions harder to execute worldwide.

Speaking at the Mint India Investment Summit in Mumbai, Mahadevia highlighted that uncertainty often creates openings for investors willing to navigate complexity.

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“It’s different types of deals, but deal making is very much happening and I think when you look at India and Asia in particular, our pipeline is as robust as I’ve seen it,” Mahadevia said, emphasizing that disruptive periods allow investors to stand out and deliver differentiated returns.

While dealmaking dynamics may shift, activity remains strong. “It’s more complicated, requires more work, and some real guts and resilience to live through periods of volatility,” he noted.

Mahadevia pointed to a broader shift within private equity—toward growth buyouts. Large private equity (PE) players are increasingly taking control positions in companies rather than just minority stakes, allowing them to scale businesses more effectively.

“We are actually taking control positions, buyout positions in these companies. It’s providing a scale and it’s providing us the opportunity to then really drive business more than we would as a minority growth investor. We’re doing both as private equity players,” he said.

However, he noted that this segment of the market remained active even when valuations were higher last year and hasn’t shifted simply because the market has cooled. “Private equity investments (in India) have only accelerated every year for the last five years, other than I would say in 2021, when tech investments shot up, if you take that out, it’s just accelerated consistently,” he said.

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On exit strategies, Mahadevia acknowledged that public market exits have become more challenging in a down cycle. “You have to look at sponsor-to-sponsor exits, find a strategic buyers, if it’s a controlled position, if it’s a minority position, you have to be more creative and find other ways to basically monetize it,” he said.

However, he argued that these shifts are cyclical, with public and private exit routes alternating in prominence over time. “We’ve seen cycles when you have more public market exits, and you have cycles when you have more private market exits, and you’re probably going into a little bit of that cycle this year.”

When asked about investment destinations beyond the US, Mahadevia pointed to India and Japan as the top choices for global investors.

“In Europe, there are growing concerns on multiple fronts. As for China, investor sentiment has cooled significantly,” he said. “With US exceptionalism being questioned for the first time in decades, there’s an opportunity for India and other markets to attract more capital.”

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He noted a shift in investor priorities. “Six months ago, if you asked where to deploy capital, the immediate answer would have been the US, with some allocation to India or Japan. But today, investors are reassessing. How much exposure should they maintain in the US? Should they diversify into other markets? That shift creates an opening for countries like India,” he explained.

Mahadevia struck an optimistic tone on India, highlighting the country’s strong fundamentals. Government regulators are receptive, industry bodies are engaged, entrepreneurs are eager to scale up, and capital is ready to flow in, he said.

Looking at the long-term outlook, he posed a question: “Which other economy has an opportunity to become a $10 trillion economy in the world? India has the best opportunity to get there, as you look at it with a global lens,” he said.

However, he cautioned that potential alone isn’t enough. “India’s always had the potential to be a $10 trillion economy, but…all constituents, have a part to play responsibly, in order for India to reach its $10 trillion potential,” said Mahadevia.

A critical factor, he noted, is manufacturing, and the government is right to push for scaling in the sector. “Few (economies) have reached that stage ($10 trillion economy) just by being services economies on domestic consumption to start with. Everyone’s had a manufacturing base, and I think I see it happening slowly.”

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But opportunity doesn’t guarantee success, Mahadevia warned. “India has a lot of work to do to realize this potential—but the opportunity is there.”