PE/VC investments in India reach USD 20.5 Bn

Private equity and venture capital (PE/VC) investments in India fell sharply during the first half of 2026, with total investments declining 36% year-on-year to USD 20.5 billion, according to the latest EY-IVCA monthly PE/VC roundup. The report noted that Q2 2026 was the weakest quarter for PE/VC investments in the last six years by value, reflecting cautious investor sentiment and slower deal activity.

During the January-June period, India recorded 604 PE/VC deals, down 18% from 734 deals in the corresponding period last year. Compared with the second half of 2025, investment value declined 29%, while deal volume fell 19%.

Pure-play PE/VC investments, excluding real estate and infrastructure, stood at USD 14.2 billion, down 29% year-on-year. Investments in real estate and infrastructure declined 47% to USD 6.3 billion. 

Growth investments emerged as the largest investment category during the first half, attracting USD 7 billion across 111 deals. Buyout transactions followed at $5.4 billion, while startup investments declined 22% year-on-year to USD 5.3 billion across 396 deals. Credit investments also witnessed a sharp decline to USD 2.2 billion, while PIPE investments fell to USD 522 million.

Among sectors, real estate led with USD 4.1 billion in investments, followed by technology at USD 3.1 billion and financial services at USD 3 billion.

Commenting on the findings, Vivek Soni, Partner and National Leader, Private Equity Services, EY, said: “PE/VC activity remained tepid during 1H2026, with average monthly investments declining to USD 3.4 billion compared with USD 5.3 billion in 1H2025. Investor sentiment remained cautious as geopolitical tensions, higher crude oil prices, rupee depreciation and valuation gaps between buyers and sellers contributed to softer deal activity, making Q2 2026 the slowest quarter for PE/VC investments in the past six years.”

Despite the overall slowdown, the report highlighted strong investor interest in India’s digital infrastructure ecosystem. Between 2021 and June 2026, data centers and allied sectors attracted around USD 45.3 billion across 86 deals, driven by rising demand for cloud computing, AI infrastructure, telecom networks and semiconductor capabilities.

The report noted that data centers accounted for USD 41.9 billion of cumulative investments and commitments, while telecom infrastructure attracted USD 2.6 billion. Although semiconductor investments totaled USD 459 million, the segment recorded the highest number of deals, reflecting growing investor interest in the broader semiconductor ecosystem.

PE/VC exits also declined during the first half of the year. Total exits stood at USD 9.4 billion across 95 transactions, down 29% year-on-year. Open market exits accounted for the largest share at USD 4.1 billion, followed by strategic exits worth USD 3.4 billion. 

On the fundraising front, however, the market remained active. PE/VC funds raised USD 21.2 billion across 48 funds during H1 2026, more than doubling the USD 10.1 billion raised in the corresponding period last year. The largest fundraise was Bain Capital’s Asia Fund VI, which secured USD 10.5 billion, exceeding its original target of USD 7 billion.

Looking ahead, EY expects investor confidence to improve as corporate earnings, policy measures and stabilisation in macroeconomic conditions support deal activity. The report added that India’s long-term economic growth prospects, improving valuations and continued investment in digital infrastructure are expected to create opportunities for PE/VC investors over the medium to long term.