Private equity and venture capital (PE/VC) investments in India fell 59 per cent year-on-year in May to $2.1 billion across 76 deals, the lowest monthly investment activity since November 2023 in both value and deal count, as geopolitical uncertainties and valuation gaps weighed on deal-making.
According to the latest IVCA-EY monthly report, total investments stood at $2.1 billion, down 24 percent from $2.7 billion through 83 transactions in April 2026. Investments were at $5.1 billion across 118 deals a year ago.
Pure-play PE/VC investments, excluding real estate and infrastructure, declined 21 per cent year-on-year to $1.5 billion, while investments in real estate and infrastructure dropped 83 per cent to $541 million.
Large deals
The largest investment during the month was the launch of North Star, a $300-million renewable energy platform by British International Investment and Copenhagen Infrastructure Partners. Five deals valued at over $100 million together accounted for more than half of the month’s total investments.
Geopolitical tensions had escalated in April and May prompting investor caution and subdued PE/VC investment activity. “Although we appear to be approaching an end to the Iran conflict, there is still a lot of uncertainty and bid-ask spreads between seller expectations and buyer valuations continue to pose hurdles, making deal closures protracted and often delayed,” said Vivek Soni, partner and national leader, Private Equity Services, EY.
Soni also said that the measures undertaken by the Government and the Reserve Bank of India, the Rupee has been relatively stable. “India’s underlying macroeconomic fundamentals remain strong as reflected in continuing growth in consumer demand and service exports and digitisation of the economy. With the Indian government responding to investor concerns, we remain optimistic that PE/VC deal activity will regain momentum as global uncertainties begin to ease,” he said.
Buyout transactions were the largest investment category during the month, attracting $840 million, followed by growth investments at $560 million. Startup investments fell sharply to $340 million, down 68 per cent from a year earlier.
Financial services saw the most investments with $402 million, followed by e-commerce at $312 million and infrastructure at $300 million. Together, the three sectors accounted for nearly half of the month’s PE/VC investments.
Meanwhile, PE/VC exits remained strong, rising 162 per cent year-on-year to $2.7 billion across 14 deals, led by strategic exits worth $1.4 billion. The sale of an 80 per cent stake in Rajasthan Royals by Emerging Media Ventures and RedBird Capital Partners accounted for more than half of the total exit value during the month.
Fundraising, meanwhile, touched a record $11.3 billion across 10 funds, driven largely by Bain Capital’s $10.5-billion Asia Fund VI, making it the highest monthly fundraise on record.