Tech leads, but deal flow slows: India's PE investments down 32% in 2025

While fundraising remains below peak levels, the cumulative capital raised since 2022 now exceeds $28 billion.

India’s private equity (PE) market turned cautious in the first nine months of 2025, with total investments falling 31.6% year-on-year to US$8.1 billion, as investors reined in deal-making amid global geopolitical tensions and domestic macroeconomic uncertainty, according to data from LSEG Deals Intelligence.

 

Despite the slowdown, technology-led sectors continued to attract the bulk of investor attention. Internet-specific and software companies together drew over US$4.7 billion, accounting for more than half of total PE inflows, though this represented an 8.8% decline from the same period last year — a sign that even resilient digital segments are facing selective capital deployment.

 

 

“India’s private equity market reflected a cautious tone in the first nine months of 2025, shaped by geopolitical and macroeconomic uncertainties,” said Vianca Sanchez, Analyst, LSEG Deals Intelligence.

 

Tech leads, but at a slower pace

 

While India’s digital economy continues to be a magnet for private investors, deal momentum has clearly moderated. The internet and software sectors, which have historically driven large-ticket investments, saw smaller deal sizes and slower closure rates as funds became more selective.

 

Startups in areas like enterprise SaaS, fintech, and e-commerce continued to receive backing, but investors preferred late-stage or profitable businesses, reflecting a “value over velocity” mindset.

 

In contrast to the slowdown in deployment, fundraising activity by India-focused private equity funds rose 24.3% year-on-year to US$3.6 billion during the same period.

 

Cumulatively, PE funds have raised over $28 billion since 2022, leaving ample dry powder for future investments once market conditions stabilize.

 

While overall activity remains below pre-2023 peaks, sentiment is far from bearish. Investors are watching for clarity on global interest rates, trade flows, and domestic policy stability, which could trigger a rebound in deal activity.

 

“As India continues to position itself as a digital and consumption-driven economy, the outlook for private equity remains cautiously optimistic,” Sanchez added. “Investors are closely watching for macroeconomic stabilization and policy developments to guide renewed investment momentum.”  Top 10 Private Equity Deals in India, 2025 YTD (Source: LSEG) 

The Top 10 PE transactions year-to-date collectively attracted US$2.05 billion, led by Muon India Pvt Ltd’s US$405 million funding in the transportation space and Meesho Payments’ US$270 million round in fintech