PE/VC investment value declines 24% in May, says EY-IVCA report

Private equity and venture capital investments fell to $2.1 billion across 76 deals in May as geopolitical tensions and valuation mismatches dampened deal activity, EY-IVCA said

May saw private equity and venture capital (PE/VC) investments in India decline 24 per cent sequentially to $2.1 billion across 76 deals, as geopolitical tensions and valuation mismatches weighed on dealmaking, according to the latest EY-IVCA monthly report.

 

The investment value was down 59 per cent from $5.1 billion across 118 deals in May 2025. On a month-on-month basis, the deal count fell 8 per cent from 83 transactions in April 2026.

 

Buyout transactions emerged as the largest investment category during the month, attracting $840 million, followed by growth investments at $560 million.

 

By sector, financial services led with $402 million in investments, ahead of e-commerce at $312 million and infrastructure at $300 million. Together, the three sectors accounted for 49 per cent of total PE/VC investments in May.

 

 

The month witnessed five deals exceeding $100 million, together worth $1.1 billion, accounting for 53 per cent of the overall investment value. The largest transaction involved British International Investment and Copenhagen Infrastructure Partners launching North Star, a $300 million renewable energy platform in India.

 

Pure-play PE/VC investments stood at $1.5 billion, down 21 per cent year-on-year, while investments in real estate and infrastructure fell 83 per cent to $541 million. Compared with April, pure-play investments declined 14 per cent, while real estate and infrastructure investments were down 42 per cent.

 

"May recorded $2.1 billion in PE/VC investments, marking a 59 per cent year-on-year decrease from $5.1 billion in May 2025 and a 24 per cent month-on-month drop compared with $2.7 billion in April 2026. Deal activity also weakened, falling to 76 transactions in May 2026," said Vivek Soni, partner and national leader, Private Equity Services, EY.

 

Soni said geopolitical tensions, the Iran conflict and currency volatility had made investors cautious, resulting in subdued investment activity during April and May. While the reopening of the Strait of Hormuz and softer crude oil and commodity prices have improved sentiment, uncertainty and valuation gaps between buyers and sellers continue to delay deal closures, he said.

 

He added that measures undertaken by the government and the Reserve Bank of India, along with a relatively stable rupee and strong macroeconomic fundamentals, including consumer demand, service exports and digitisation, could help restore momentum in PE/VC activity as global uncertainties ease.

 

On the exit front, PE/VC exits rose sharply to $2.7 billion across 14 deals in May, compared with $1 billion across 20 exits a year earlier and $730 million across 15 exits in April. Strategic exits accounted for 52 per cent of the total exit value at $1.4 billion.

 

The largest exit during the month was the sale of an 80 per cent stake in Royal Multisport (Rajasthan Royals) by Emerging Media Ventures and RedBird Capital Partners for $1.4 billion to Lakshmi Mittal, Aditya Mittal and Adar Poonawalla.

 

Separately, fundraises touched a record monthly high of $11.3 billion across 10 funds in May, up 1,645 per cent from April and 278 per cent from a year earlier. The largest raise was Bain Capital's Asia Fund VI, which closed at $10.5 billion, including about $9.1 billion of external commitments.