FINANCEOUTLOOKINDIAMARCH, 20249Reddy told NDTV Profit at the sidelines of the conclave."All the problem cases are getting surfaced; they're getting addressed. Some might die, some might go bankrupt, and some might have downturns, but they'll fix themselves. So what didn't get cleaned in 2023 will get cleaned in 2024. When this happens in venture capital, it clears the air, and people know what exactly they're buying at what price," he said.Even with probable downturns ahead, Reddy added that price resets remain difficult. "It's never been seen in venture capital for 15 years; other than Flipkart's downround in 2016 and Ola's back then, there's been very few that have taken massive downrounds; that's only happened in the last two years. So we haven't finished that cycle, and when that happens is when capital comes confidently, and that will begin to happen during the second half of 2024," he said.Even with future downturns, Reddy emphasized that price resets remain difficult. "It's never been seen in venture capital for 15 years; other than Flipkart's downround in 2016 and Ola's back then, there's been very few that have taken massive downrounds; that's only happened in the last two years. So we haven't finished that cycle, and when that happens is when capital comes confidently, and that will begin to happen during the second half of 2024," he said.According to Reddy, the first two months of 2024 saw a surge in excitement, actions, and talks. "India is the new frontier market for them, where they need to spend more time and investment. We won't get the same capital, but it will be replaced. Perhaps we won't get Tiger Global coming in as aggressively, but Softbank is starting again. You will have other pools in Asia reorganizing themselves. For example, if they had a China combined pool, they'd have to separate that so that the regulator and the government are okay looking at a standalone India-dedicated pool," he said.Reddy stated that private equity dealmaking has been active. "They're taking the lead on capital increases. According to what I'm hearing, the best funds in India are getting overcrowded. This year, dedicated India funds will see record levels of committed capital for private equity. India is a vital platform both individually and collectively.However, Reddy stated that the ecosystem must get its act together and deliver on exits."So unless we start churning out IPOs, because I don't expect mergers and acquisitions to be as strong in terms of cash outcomes, the big cash will only come from IPOs. I'm hoping we get our act together in the next 24 months and push out a lot of IPOs that generate cash. Like recently, Fireside has something from Mamaearth; these sort of $50-100 million exits from IPOs are important for the ecosystem to start seeing a lot more commitments," he said.
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