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India's PE Market Rebounds 44% in Q4 2025, Tech Sectors Lead

India's private equity activity saw a strong quarterly rebound in Q4 2025, with investments rising 44.3% to $3.7 billion. However, for the full year, total PE investments declined by nearly 24% to $12.1 billion, reflecting a cautious environment. Technology-led sectors, including internet and software companies, remained resilient, attracting more than half of all PE capital deployed. Fundraising activity slumped to its lowest level since 2017, while reports point to digitization, clean energy, and AI as key drivers for India's next growth wave.

Key Points: India PE Investments Jump 44% in Q4 2025, Report Shows

  • Q4 PE investments hit $3.7B, up 44%
  • Full-year 2025 investments fell 24% to $12.1B
  • Tech sectors absorbed over half of total capital
  • Fundraising hit a low of $3.8B, weakest since 2017
  • AI, green ports, quick commerce seen as future growth drivers
2 min read

India's private equity market rebounds 44 pc in Q4 2025: Report

India's private equity investments surged 44.3% to $3.7B in Q4 2025, though full-year activity fell. Tech sectors remained resilient.

"Although the slowdown... technology‑led sectors remained comparatively resilient. - Vianca Sanchez, Analyst, LSEG Deals Intelligence"

New Delhi, Jan 13

India's private equity activity strongly rebounded in the fourth quarter of 2025 with investments touching $3.7 billion, up 44.3 per cent from the previous quarter, a report said on Tuesday.

The report from London Stock Exchange Group (LSEG) said that total equity investments in Q4 touched the highest quarterly level since Q4 2024.

Despite the late‑year surge, full‑year private equity investments eased 23.7 per cent year‑on‑year to $12.1 billion, underscoring the continued impact of a cautious investment environment for much of the year, the report said.

"Although the slowdown in investment activity was broad‑based, technology‑led sectors remained comparatively resilient, continuing to absorb the majority of private equity capital," said Vianca Sanchez, Analyst, LSEG Deals Intelligence.

Internet‑specific and computer software companies attracted a combined $6.7 billion in 2025, representing more than half of total PE deployment, the report said.

It added that investment in these sectors still moderated 1.9 per cent year‑on‑year, reflecting heightened investment selectivity.

Fundraising was subdued, with Indian private equity fundraising falling to $3.8 billion in 2025, the lowest since 2017, the report said.

Fundraising activity in India remained subdued in 2025, mirroring a broader global slowdown in private equity capital formation.

Cumulative capital raised since 2022 stood at about $28.5 billion, which may support deal activity as investor confidence improves and valuation expectations realign, the report noted.

Another recent report from a business analytics firm projected a stable macroeconomic environment and emphasised that India's next wave of growth will be led by digitised logistics, trusted data, clean energy, and city vitality rewire productivity.

Emerging sectors like AI, green ports and quick commerce will enhance competitiveness and create inclusive growth opportunities across regions and industries, it said.

The report highlighted the need for crowding in private capital, strengthening human capital, and leveraging policy support to fuel sustainable transformation.

- IANS

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Reader Comments

R
Rohit P
Good to see the Q4 numbers, but the full year is still down almost 24%. The fundraising number at $3.8 billion is worrying - it's the lowest since 2017. We need more domestic capital pools to reduce dependency on foreign cycles.
A
Arjun K
The report rightly points out the need for "crowding in private capital". Government initiatives like PLI are a start, but we need deeper pension and insurance fund reforms to unlock long-term Indian capital for these sectors. The future is in digitised logistics and green energy!
S
Sarah B
Interesting data. While the tech sector resilience is a global trend, it's promising for India's startup ecosystem. The mention of "heightened investment selectivity" is key - investors are being smarter, not just chasing growth at any cost. That leads to healthier companies.
V
Vikram M
Hope this momentum continues into 2026. The focus should be on inclusive growth - making sure investments in AI and quick commerce actually create jobs across smaller cities and towns, not just in Bengaluru and Gurugram.
K
Karthik V
With respect, the report highlights a critical issue but doesn't fully address it. "Strengthening human capital" is mentioned, but where is the detailed roadmap? We have a demographic dividend, but need massive upskilling in these emerging sectors to avoid a talent crunch. The government and private sector must collaborate more closely on this.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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