Indian Solar Energy Firms' Funding Down By 9% To $1.55 Bn In 2023: Report
Total funding into solar Energy companies in India fell 9 per cent to USD 1.55 billion in 2023 from USD 1.7 billion in 2022, according to a Geo Solar Energy report by Tracxn, a market intelligence platform.
The solar energy sector in India has witnessed a total of 39 (USD 100 million plus) rounds to date, out of which 12 have taken place in the last two years. No unicorns have emerged from this sector so far.
Among the cities, Delhi takes the lead in terms of total funding to date, followed by Gurgaon and Mumbai. Solar energy companies based in Delhi have raised USD 3.1 billion to date, followed by those based in Gurugram (USD 2.7 billion) and Mumbai (USD 2.3 billion).
There has been notable activity in terms of exits within this sector. The Indian solar energy sector has seen 43 acquisitions to date, of which 16 acquisitions were witnessed in the last few years, and 2024 has seen only one acquisition so far. Further, 49 companies have gone public to date, out of which three IPOs took place in 2023 and two in 2022.
The report added that IFC, Villgro, and DFC are the most active investors in the Indian Solar Energy space to date. CIIE, Social Alpha, and Villgro are the top seed-stage investors in this space, while Acumen, CIIE, and FMO are the top early-stage investors. Axis Bank, British International, and KKR are the top late-stage investors in this space.
The government of India has provided incentives worth more than USD 3 billion in the last three years. States such as Gujarat, Rajasthan, Karnataka, and Tamil Nadu are already generating more than 9 MW of solar energy.
The Indian government has set a target of net zero emissions by 2070. It also plans to diversify 50 per cent of its electricity requirement to renewable energy by 2030.
The government also encourages 100 per cent foreign direct investment (FDI) through the automatic route to promote solar energy within the country. "These initiatives are expected to bolster solar energy companies and accelerate sectoral growth," the report claimed.
This sector secured funding worth USD 1.55 billion in 2023, 9 per cent lower than the USD 1.7 billion raised in 2022. However, within the first month of 2024, this space has witnessed USD 1 billion in funding, with Sukhbir Agro Energy raising USD 1 billion in its private equity round in January 2024, it added,
The majority of the funding in this space comes from late-stage rounds. However, a decline in late-stage investments led to a subsequent drop in overall funding in 2023. Companies in this space attracted late-stage funding worth USD 1.3 billion in 2023, a 23 per cent decrease from the USD 1.7 billion raised in 2022.
A sharp surge was observed in early-stage funding, which rose six-fold to USD 252 million in 2023 from USD 39 million in 2022. Seed-stage funding in this space has raised a total of USD 11.5 million in 2023, a growth of 58 per cent compared to the US$7.26 million raised in 2022.
