PE/VC Funding Sees Decline in August 2025: Report PE/VC exits stood at USD 1.9 billion across 17 deals in August 2025, 30 per cent lower than in August 2024, according to the report.
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Private equity and venture capital (PE-VC) investments in India decreased by 31 per cent in August 2025, compared to July 2025 in value terms, according to the EY-IVCA monthly PE/VC roundup.
According to the report, pure-play PE/VC investments in August 2025 at USD 2.2 billion increased by 6 per cent compared to August 2024. In August 2025, start-up investment deals reached a record high of USD 1.5 billion, followed by growth investments at USD 901 million. From a sector point of view, financial services was the top sector in August 2025, recording USD 783 million in investments, followed by automotive.
PE/VC exits stood at USD 1.9 billion across 17 deals in August 2025, 30 per cent lower than in August 2024, according to the report.
PE/VC investments in August 2025 totaled USD 2.8 billion, 8 per cent lower than the USD 3.1 billion recorded in August 2024. According to the report, this was 31 per cent lower than the USD 4.1 billion recorded in July 2025.
The number of deals in August 2025 increased by 10 per cent year-on-year, with 115 deals compared to 105 in August 2024, and 2 per cent lower than July 2025, with 117 deals.
Vivek Soni, Partner and National Leader, Private Equity Services, EY, said that the sentiment among PE/VC investors continues to be cautious. On one hand, global headwinds such as geopolitical uncertainties, shifting trade tariffs and immigration policies, and the continued rupee depreciation have dampened confidence.
"On the other hand, domestic indicators remain encouraging—robust GST collections, growth in advance direct tax collections, a strong pipeline of IPOs, and resilient consumption demand continue to reflect the underlying strength of the Indian economy, keeping seller expectations high. Moreover, the recent reduction in GST rates is expected to boost household disposable income, further supporting a consumption-driven growth cycle that could provide a green flag to investors. Looking ahead, US tariff and immigration policy updates, Federal Reserve rate cuts and domestic quarterly corporate earnings are the three main factors that will collectively shape investor sentiment. As of now, the bid/ask spread between sellers and buyers remains high, impacting investment activity. We remain cautiously optimistic on the short-term outlook for Indian PE/VC investment and exit activity," said Soni.
The month also saw six large deals totaling USD 1.1 billion, reflecting a 33 per cent decrease in value compared to August 2024 and a 59 per cent decrease compared to July 2025. Large deals accounted for 41 per cent of overall PE/VC investments in August 2025. The largest deal of the month is the Green Climate Fund and others investing USD 405 million in Muon India (Vertelo).
According to the report, the trend of PE/VC-backed IPOs in India has accelerated in recent years, underscoring the increasing maturity and depth of the country's capital markets. Public listings have emerged as a preferred exit route for investors, as they often provide higher valuations and liquidity compared to private transactions.
"Over the past few years, PE/VC-backed IPOs have grown strongly, supported by buoyant capital markets, higher valuation multiples in mid- and small-cap companies, and strong investor demand for high-growth businesses. The deepening of Indian markets has enabled PE/VC funds to secure efficient and smooth exits at good valuations," said Soni.
