Strong Exits and Deal Values Signal Maturing PE Market In India India's private equity (PE) and venture capital (VC) investment landscape in 2025 reflects a market navigating both macroeconomic headwinds and sectoral realignments: In the first half of the year, PE/VC investments totaled USD 26.4 billion across 593 deals, according to the latest data from the EY-IVCA Mid-Year Report.

India's private equity (PE) and venture capital (VC) investment landscape in 2025 reflects a market navigating both macroeconomic headwinds and sectoral realignments: In the first half of the year, PE/VC investments totaled USD 26.4 billion across 593 deals, according to the latest data from the EY-IVCA Mid-Year Report.

This marks an 11 per cent increase from the second half of 2024, at USD 23.8 billion, although it represents a 19 per cent year-on-year decline from the first half of 2024, which saw investments of USD 32.4 billion.

The composition of these investments reveals significant shifts. Pure-play PE/VC investments amounted to USD 18.3 billion, down slightly from USD 18.9 billion in the year-ago period. However, real estate and infrastructure investments declined more dramatically, by nearly 40 per cent, to reach just USD 8.1 billion. This trend highlights a shift in investor interest away from asset-heavy sectors toward technology, financial services, and emerging growth areas.

Emerging markets like India are entering a pivotal growth phase, prompting private equity firms to rethink their strategies with a sharper operational lens, according to Vishal Seth, Managing Director, Protiviti Member Firm for India.

"Over the next 3–5 years, we can envisage a decisive shift of PE firms from only 'financial support' to 'active value creation', through involvement with initiatives across Operational optimization, such as digital transformation, strengthening of governance & Strategy execution, such as platform consolidation," said Seth.

"This shift reflects a broader evolution in private equity investing, particularly in high-potential markets like India, where macroeconomic momentum is converging with micro-level transformation. Rising middle-class consumption, progressive policy reforms, and a thriving startup ecosystem are creating fertile ground for innovation-led growth across sectors such as healthcare, tech services, green energy, and advanced manufacturing," added Seth.

A survey conducted by law firm Khaitan & Co further emphasized India's appeal, noting that despite global PE slowdowns, foreign capital remained strongly committed to the Indian market.

Foreign funds accounted for the majority of large-ticket investments, particularly in sectors such as IT services, SaaS, financial inclusion, and consumer tech. According to Khaitan, India is increasingly viewed as a strategic bet by global fund managers looking to hedge against China-related exposure and currency volatility in other emerging markets.

"PE firms are increasingly backing founders/promoters and founding management teams that have 'skin in the game' and a proven ability to scale operations both locally and globally. This alignment of incentives is becoming a critical success factor in value creation," said Seth.

Adding to the trend, LeapFrog, an impact-focused private equity investor operating across emerging markets in Africa and Asia, recently announced a successful exit from Fincare, now known as AU Bank. According to the firm, the exit marked a return of over 3.3x in rupees for LeapFrog's Fund II.

Over the investment period, Fincare's assets under management (AUM) grew to more than INR 143 billion (USD 1.7 billion), and its profitability increased 5.3x to more than INR 4 billion (USD 47 million) as of the merger date.

Pranav Kumar, Partner at LeapFrog Investments, said, "India's deep capital markets provided a number of exit opportunities, but ultimately the merger with AU Bank and consequent on-market sale was the best result for Fund II."