India's PE Market Surges 66.4% in Q1 2026, Led by Tech and Energy

The report from the London Stock Exchange Group described Q1 2026 as the strongest opening quarter since 2024, with recovery driven by a pickup in deal volumes and a handful of larger transactions.

Technology‑led sectors remained a key driver as internet‑specific and computer software investments surged 24.1 per cent YoY to $1.87 billion.

These sectors continued to attract the largest share of capital, but their relative dominance moderated, with market share declining to 49 per cent from 65 per cent in the previous year. The trend reflected a wider diversification of investment across sectors, the financial markets data provider said.

The shift in investor focus was most evident in energy, where renewable energy and clean infrastructure investments sharply surged during the quarter.

"Indian private equity funds raised $625.3 million during the quarter, bringing cumulative capital raised since 2022 to approximately $29.1 billion, providing a substantial pool of dry powder as investor confidence improves," said Vianca Sanchez, Analyst, LSEG Deals Intelligence.

Companies in the industrial and energy sector attracted $909.1 million, making it the second most invested sector after technology-led industries. These companies also saw a thirtyfold increase from the same period last year.

The shift also highlighted a growing alignment between private equity capital and India's energy transition agenda, supported by continued policy backing and rising domestic energy demand.

Fundraising activity stabilised in Q1 2026 following a particularly slow end to 2025, although overall capital formation remained muted amid persistent geopolitical and macroeconomic uncertainty across the Asia-Pacific region, the report said.

The LSEG had in January found that 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.

- IANS