Mumbai— Private equity and venture capital (PE-VC) investments in India totaled $2.4 billion across 97 deals in May, according to a report released Monday by EY and the Indian Venture and Alternate Capital Association (IVCA).
Startups led the deal activity, followed by growth-stage investments, which accounted for $700 million of the total. Financial services emerged as the top sector, attracting $758 million in funding, while the real estate sector followed with $380 million.
Despite the activity, overall PE/VC momentum remained subdued. Vivek Soni, Partner and National Leader for Private Equity Services at EY, attributed the slowdown to persistent global challenges, including heightened geopolitical tensions and U.S. tariff policies. He noted that these external factors have created a cautious environment, with fewer large-scale transactions—particularly those exceeding $100 million.
In terms of deal volume, pure-play investments declined 16 percent year-on-year, while real estate and infrastructure deals saw a steep 64 percent drop.
Exits also remained moderate. PE/VC exits in May stood at $1 billion across 18 deals. Open market exits made up 77 percent of this value, totaling $797 million.
Soni explained that one of the key challenges hampering investment activity is the lack of alignment between seller expectations and buyer valuations. “The bid-ask spread has not meaningfully narrowed, and this mismatch continues to weigh on deal flow,” he said.
However, there are some encouraging domestic signals. Strong Goods and Services Tax (GST) collections, a rebound in the Indian rupee from early-year lows, and the Reserve Bank of India’s recent interest rate cut are expected to improve liquidity and spur renewed deal activity.
“If global uncertainties ease and there is a convergence in valuation expectations, we anticipate a potential uptick in deal momentum in the second half of the year,” Soni added. “We remain cautiously optimistic.” (Source: IANS)
