Weekly Funding Review: Private Equity and Venture Capital investment values decline, however Mergers and Acquisitions surge forward
In the dynamic world of private equity (PE), venture capital (VC), and mergers and acquisitions (M&A) in India, 2025 has shown a mix of robust growth and careful investment strategies.
Recent data indicates a decline in PE/VC investments, with the total amount raised dropping by 53% in May 2025 compared to April and 68% year-on-year versus May 2024, amounting to approximately USD 2.4 billion across 97 deals. This slowdown is attributed to increased investor caution in the face of macroeconomic and geopolitical uncertainties.
The focus of PE/VC investments remains on key sectors such as financial services, real estate, technology, infrastructure, healthcare, pharmaceuticals, and the renewable energy sector. The green energy transition is a particularly strong theme, reflecting India’s commitment to sustainability.
Despite the decrease in funds raised, the aggregate value of M&A transactions more than doubled this week. However, specific details about the deals and companies involved were not provided.
In the exit environment, while the number of transactions slightly dipped in 2024, the exit value increased compared to the previous year. IPOs and secondary sales have remained the preferred exit routes, with public markets providing a lucrative avenue for PE investors.
Notable IPO listings in 2024 include Kedaara’s Vishal Mega Mart, which raised USD 1.7 billion, and Hexaware Technologies, which secured USD 1 billion.
The data, collated by a website, also suggests that M&A activity continues to play a significant role in exits and growth, particularly through strategic buyouts and carve-outs.
However, no significant publicized investigations involving PE/VC firms in India have emerged recently, highlighting the importance of due diligence and compliance in the current investment climate.
Looking ahead, optimism persists for India’s PE/VC ecosystem due to the country’s strong macroeconomic fundamentals, expanding sectoral opportunities, and ongoing structural reforms. The use of shared service platforms is also expected to add value, helping portfolio companies scale efficiently and gain competitive advantage.
It is worth noting that KKR-controlled Healthcare Global is currently facing an ethical-breach probe, underscoring the need for continued regulatory vigilance in the sector.
In summary, India’s private equity and venture capital landscape in 2025 is marked by a tapering off of investment activity after a strong start, robust exit markets, and an emphasis on sectors aligned with India’s growth and sustainability goals. Despite the challenges, the outlook for the future remains positive, driven by evolving sectors and a focus on sustainability.
The slowdown in PE/VC investments, as evidenced by the 53% drop in May 2025 compared to April and a 68% year-on-year decrease versus May 2024, raises questions about the finance sector's future in India. Meanwhile, the exit environment remains strong, with the aggregate value of M&A transactions more than doubling this week, highlighting the potential for different financial strategies.
