PE-VC Investments in India Slow to $2.4 Billion in May Amid Global Uncertainty
- Startup deals led May’s $2.4 billion PE-VC investments; growth capital followed at $0.7 billion.
- Financial services and real estate were the top sectors, attracting $758 million and $380 million respectively.
- PE-VC exits stood at $1 billion; investor caution continues due to geopolitical and valuation concerns.
Private equity and venture capital (PE-VC) investments in India stood at $2.4 billion across 97 deals in May 2025, according to the latest EY-IVCA report. While startup investments dominated deal activity, attracting the largest share, growth capital deals followed with $0.7 billion.
Among sectors, financial services led the investment chart with $758 million, followed by real estate at $380 million. Despite these highlights, overall PE-VC activity remained muted, with a sharp drop in large-ticket deals exceeding $100 million.
“PE/VC activity continues to remain subdued, as reflected in the limited deal flow and reduction in large deals”, said Vivek Soni, Partner and National Leader, Private Equity Services at EY. He attributed the slowdown to rising geopolitical tensions, shifting US tariff policies, and broader external challenges affecting investor sentiment.
The report also revealed a year-on-year decline in the number of deals pure-play investments fell by 16%, while real estate and infrastructure deals plunged by 64%. PE/VC exits during the month were valued at $1 billion across 18 deals, with open market exits making up 77% of that value ($797 million).
Soni pointed out that the bid-ask gap between sellers and buyers remains a key hurdle, preventing significant momentum in investment activity. However, domestic economic indicators such as strong GST collections, a recovering Indian Rupee, and a recent RBI rate cut suggest early signs of improvement.
“If global uncertainties ease and the valuation gap narrows, deal activity may pick up in the second half of the year”, Soni noted, adding that the outlook remains 'cautiously optimistic'.
