Did PE and VC Investments in India Reach $2.4 Billion Across 97 Deals in May?
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Synopsis
In May, India's PE and VC investments hit an impressive $2.4 billion across 97 deals, highlighting strong interest in startups and financial services. However, geopolitical tensions and market uncertainties have tempered investor enthusiasm. Could the second half of the year see a resurgence in deal-making? Read on to find out the latest insights and predictions.
Key Takeaways
- Total PE-VC investments in May 2023: $2.4 billion.
- Number of deals: 97.
- Top sector: Financial services ($758 million).
- Growth investments: $0.7 billion.
- PE/VC exits: $1 billion across 18 deals.
Mumbai, June 23 (NationPress) Private equity and venture capital (PE-VC) investments in India amounted to $2.4 billion across 97 deals in May, according to a report published on Monday.
The EY-IVCA report highlighted that investments in startups were the most predominant deal type last month, followed by growth investments totaling $0.7 billion.
When examining sectors, financial services emerged as the leading sector in May, garnering $758 million in investments, closely followed by the real estate sector at $380 million.
“PE/VC activity continues to appear subdued, which is evident from the limited deal flow and the decline in large transactions (those exceeding $100 million). Increased geopolitical tensions, the US tariff policy, and other external challenges have negatively impacted investor sentiment, leading to a cautious approach and a wait-and-see attitude,” stated Vivek Soni, Partner and National Leader of Private Equity Services at EY.
In terms of deal volume, pure-play investments saw a decrease of 16 percent, while the real estate and infrastructure asset classes dropped by 64 percent year-on-year.
PE/VC exits reached $1 billion across 18 deals in May, with open market exits comprising 77 percent of the total exit value in May 2025 (amounting to $797 million).
According to Soni, the gap between seller expectations and buyer valuations remains unbridged, which continues to stifle PE/VC investment activities.
“On a domestic front, initial signs of favorable momentum are surfacing, driven by robust GST collections, the strengthening of the Indian Rupee from earlier lows, and the recent rate cut by the Reserve Bank of India, which is anticipated to enhance liquidity and stimulate more deal-making,” he remarked.
“We anticipate that these elements collectively could lead to an increase in deal activity in the latter half of the year, provided there is a reduction in global uncertainties, geopolitical tensions, and a narrowing of the valuation gap between sellers and buyers. We remain cautiously optimistic,” he added.
Point of View
I believe that while the current PE/VC investment landscape shows signs of caution, underlying factors such as improved GST collections and monetary policy adjustments can spur growth. Staying informed and adaptable is essential as we navigate these dynamic market conditions.
NationPress
23/06/2025
Frequently Asked Questions
What was the total PE-VC investment in India in May 2023?
The total private equity and venture capital investment in India in May 2023 was $2.4 billion across 97 deals.
Which sector received the highest investments?
Financial services were the top sector in May, attracting $758 million in investments.
What factors are affecting PE-VC activities?
Geopolitical tensions, US tariff policies, and a cautious investor sentiment are currently impacting PE-VC activities.
How much did PE/VC exits total in May?
PE/VC exits totaled $1 billion across 18 deals in May.
What is expected for the second half of the year?
If global uncertainties ease and the valuation gap narrows, a pickup in deal activity is anticipated in the second half of the year.
