Mumbai, Mar 10: The latest edition of EY–IVCA’s flagship report, PE/VC Agenda: India Trendbook 2026, points to another strong year for private equity and venture capital activity in India. The report notes that PE/VC investments remained resilient, clocking the second-highest value on record at US$60.7 billion across 1,475 deals. This translates into year-on-year growth of 8% in deal value and 9% in deal volume. This consistent performance, despite ongoing global uncertainty, highlights the underlying strength and resilience of India’s PE/VC ecosystem.
Vivek Soni, Partner and National Leader for Private Equity Services, EY India said,
“The year 2025 was a true testament to the resilience and maturity of the Indian PE/VC landscape. Investor sentiment was shaped by a confluence of global and domestic factors like India’s key political developments, the post-US election environment, geopolitical tensions, and tariff-policy volatility under the Trump administration. These were further compounded by inflation‑management measures by the RBI and a sharply weakened rupee, all of which contributed to a cautious deployment environment.
As we look ahead, India private equity venture capital trends 2026 will be defined by the interplay of geopolitics, domestic policy shifts, valuation rationalization and macro fundamentals. In the near term, it is a ‘wait‑and‑watch’ environment as investors assess market stability, earnings visibility and the narrowing of the bid–ask spread. The most important variable at the moment is the Iran-Israel-US conflict, its aftermath and its impact on LNG and crude oil prices and availability. But the medium‑ to long‑term outlook remains unequivocally positive supported by India’s strong structural fundamentals, a deepening corporate ecosystem, and sustained global investor interest in India’s growth story. We remain cautiously optimistic.”
Key highlights from the EY-IVCA Trendbook 2026
1. Robust investment performance despite global challenges:PE/VC investment activity maintained an upward trajectory in 2025, with total investment value rising 8% year on year (US$60.7 billion), supported largely by a strong rebound in growth and credit investments. Deal activity also strengthened, with the number of transactions increasing 9% year on year, marking the highest deal count ever recorded (1,475 deals).
Growth investments led the momentum, registering a 56% increase in deal volume (282 deals), while the start-up segment saw a 19% rise (767 deals). In contrast, other investment categories credit, buyout, and Private Investment in Public Equity (PIPE) deals experienced a decline compared to the previous year.
2. Sectoral allocation
Sector allocation in 2025 largely mirrored 2024 patterns. The top five sectors financial services, infrastructure, real estate, technology, and e‑commerce contributed 72% of total investments, consistent with last year. Financial services emerged as the largest sector, overtaking infrastructure. Infrastructure, which topped the list in 2024, moved to second place in 2025.
Six sectors achieved all‑time high investment levels including financial services, Real estate, Food and agriculture, Automotive, Industrial products and Aerospace and defense.
3. Real Assets and Pure‑Play PE
Real assets (infrastructure + real estate) rebounded by 2% in 2025 after an 8% contraction the previous year. Pure‑play PE/VC investments grew 12%, moderating from 15% growth in 2024, continuing to form a key pillar of India’s deal pipeline.
4. PE/VC exits continued to rise for the third consecutive year
PE/VC exits surged to the second highest in 2025, totaling US$32.9 billion across 257 exits.
Strategic exits rebounded, growing 211% year on year to reach US$16 billion, accounting for 48% of total exits during the year.
5. Fundraising activity touched a record high
Fundraising activity surged in 2025, reaching an all-time high of US$23.2 billion, a significant increase from US$9.8 billion raised in the previous year.
The number of fundraises also hit a historic peak, rising 35% year on year to 123 fundraises, marking the highest annual count to date.
What could drive investor caution in 2026
Despite entering 2026 on a strong foundation, several emerging complexities could shape investor sentiment and slow the pace of capital deployment. Policy uncertainty remains a concern, as recent developments around US tariff adjustments for Indian exports—while directionally positive—still require clarity on operational guidelines, which continues to limit business‑planning visibility. Policy uncertainty remains a concern, as the recent reduction of US tariffs on Indian exports—from 25% to 18% following a Supreme Court ruling—has offered directional relief, but operational guidelines are still awaited, limiting business planning visibility.
Equity markets have also shown heightened volatility post‑Budget, triggered by the increase in Securities Transaction Tax (STT), which has had a cascading effect on valuations and exit timeline. At a global level, evolving geopolitical developments continue to create pockets of uncertainty, particularly around energy markets, which may influence input costs and disrupt macroeconomic stability.
Domestic corporate earnings too present a mixed picture, with early-2026 results revealing strength in financial services, IT, healthcare and industrials, contrasted by softness in energy, metals, mining and telecom. Adding to caution is the rupee’s depreciation to INR 92 per USD, which has raised concerns around return expectations for foreign investors. Finally, a widening bid–ask spread—driven by sellers holding firm on elevated valuation expectations while buyers exercise greater discipline—continues to delay deal closures. Together, these factors contribute to a more measured and cautious investment outlook for 2026.
Reading the field for 2026: The signals supporting India’s PE/VC outlook Again sentence case pls.
Despite short‑term uncertainties, India’s structural fundamentals continue to provide a strong foundation for sustained PE/VC activity in 2026. The country’s GDP is expected to expand at around 7%, keeping India among the fastest‑growing major economies. Monetary conditions are also supportive, with the RBI’s 125‑bps rate cuts in 2025 and inflation trending toward 4% creating an enabling environment for capital deployment. The Government’s continued capex push—reflected in the FY27 allocation of INR 12.2 lakh crore—will further strengthen infrastructure and manufacturing pipelines. At the same time, progress toward an interim India–US tariff agreement, reducing duties to 18% across key sectors, reinforces a constructive medium‑term outlook. Together, these drivers underpin a broadly positive investment environment for 2026.
