PE-VC investments in India fall 14% to $13.7 billion in March quarter

The first quarter of the calendar year 2025 recorded $13.7 billion in private equity and venture capital investments in India, 14% lower than investments in the same quarter of 2024 and 2% lower than the December quarter, according to a report by EY-IVCA.

The pure-play PE/VC investments in Q1 2025 ($10.9 billion) increased by 62% compared to Q1 2024 ($6.7 billion), said Vivek Soni, Partner and National Leader, Private Equity Services, EY, said. The number of deals in January-March 2025 was 20% lower year-on-year.

The first quarter of 2025 saw a decline in large deals, with 32 deals totalling $10.4 billion compared to 34 large deals worth $11 billion in the corresponding period of 2024 and 34 large deals in the last quarter of 2024 valued at $10.1 billion. These large deals included New Mountain Capital’s acquisition of Access Healthcare services for $1.5 billion and Temasek's purchase of a 10% stake in Haldiram Snacks Food Pvt Ltd for $936 million.

“The real estate and infrastructure asset class saw a decline of 69% year-on-year ($2.8 billion in Q1 2025 versus $9.2 billion in Q1 2024). Compared to Q4 2024, pure-play PE/VC investments grew by 19% ($9.1 billion in Q4 2024), and real estate and infrastructure investments declined by 42% ($4.9 billion in Q4 2024),” said Soni.

In terms of the number of deals, pure-play and real estate and infrastructure asset classes both declined, by 6% and 67% year-on-year, respectively.

Buyout investment deals emerged as the highest at $5.2 billion, followed by growth investments at $3.1 billion in the March quarter. From a sector point of view, technology was the top sector, recording $3.1 billion, followed by infrastructure ($2.3 billion).

PE/VC exits were recorded at $8 billion across 39 deals in the March quarter, 57% higher than the same period last year ($5.1 billion). Strategic exits accounted for 51% of all exits by value ($4.1 billion) in the January-March quarter.

“The COVID-19 pandemic significantly changed perceptions of healthcare needs, driving growing demand for clinics and medical devices. As people adopted more health-conscious lifestyles and appetite for wellness increased, the shift attracted PE/VC investors. These investors are particularly interested in the start-up space, seeking innovative healthcare solutions,” said Soni.

While a few large deals helped sustain the PE/VC investment value in 1Q2025, overall investor sentiment remains cautious on account of several macroeconomic and geopolitical factors, including policies being implemented by the current US administration, decisions on tariff, interest rate changes by central banks, and declining capital market valuations, said Soni.

“As private market valuations have yet to correct meaningfully, PE/VC investors are in no rush to close deals and are rightfully monitoring evolving conditions to ensure that macro and micro risks are adequately priced in,” said Soni.

“On the public markets side, as projected - the volatility in the mid-cap and small-cap space has ensured the closure of the IPO window for most players, which is a dampener for PE/VC exits. This, along with the reluctance of PE investors to engage at current valuations can be a tailwind for the private credit asset class,” Soni added.