Private equity investment activity in India softened further in 2025, with deal volumes declining 21% year-on-year, even as disclosed deal values increased by 14%. This divergence points to a decisive shift toward fewer but larger transactions. Investors increasingly concentrated capital in later-stage and pre-IPO companies, while Angel and Seed investments dropped to 55% of total deal volumes—down sharply from recent years—reflecting heightened scrutiny around business validation and profitability.
B2B companies accounted for more than 53% of private equity deal volumes in 2025, up from 46% in 2023, underscoring a growing investor preference for scalable, sustainable business models.
Venture Capital: Early-Stage Activity Remains Subdued
Venture capital investment activity remained cautious in 2025, with early-stage deal volumes continuing to face pressure. Series A deal volumes declined by 21% and Series B by 16%, while later-stage rounds showed relative resilience. Series C volumes increased, and Series D rose sharply by 39% and 71%, albeit from a low base, as investors prioritized companies with proven revenues and longer operating track records—reinforcing the broader shift toward more disciplined capital deployment.
In value terms, Series E+ investments declined 47%, while Series A and Series B deal values also softened during the year.
PE Exits: Exit Volumes Hit a Five-Year Low
Private equity exit volumes fell to a five-year low in 2025, reflecting ongoing valuation pressures and longer exit timelines. Exit values, however, remained broadly stable, pointing to a continued emphasis on fewer, larger monetisation events.
Open market exits continued to be the dominant exit route by volume, despite a slowdown from 2024 levels. Public offerings (IPOs) and secondary sales recorded volume growth of 50% and 26%, respectively, though from a relatively low base.
Although overall exit activity has declined over the five-year period, partial exits increased their share of total exits from 33% in 2021 to 43% in 2024, highlighting the growing adoption of staggered exit strategies by investors.
In 2025, Information Technology and Health Care emerged as the leading sectors by private equity exit volume, together accounting for nearly half of all deals, while Industrials stood out in terms of exit value.
M&A Rebounds as Strategic Confidence Returns
India’s M&A market rebounded in 2025, with deal volumes increasing 22% year-on-year and deal values rising 16%, signalling renewed confidence among corporates. Domestic transactions continued to dominate activity, accounting for nearly three-quarters of all M&A deals.
Health Care led the recovery in deal volumes, recording an 82% year-on-year increase in 2025, even as private equity funding into the sector remained constrained—highlighting consolidation-driven growth. In value terms, Financials (+51% YoY) and IT (+67% YoY) were key contributors to the upswing, alongside a sharp rise in Health Care deal value (+68% YoY).
Equity Capital Markets Cool After a Record 2024
Following a record-breaking 2024, India’s equity capital markets entered a period of recalibration in 2025. ECM deal volumes declined by 31% and deal values fell 38%, reflecting more selective and disciplined issuance conditions.
IPOs remained the dominant equity capital markets instrument, accounting for over 70% of ECM deal volumes, even as pricing became tighter. IPOs of $100 million and above contributed more than 80% of total IPO value, highlighting increasing selectivity in public markets.
