Key Points

The EY-IVCA report said that startup investments were the highest deal type last month, followed by growth investments at $0.7 billion.

From a sector point of view, financial services was the top sector in May, recording $758 million in investments, followed by real estate ($380 million).

“PE/VC activity continues to remain subdued, as reflected in the limited deal flow and reduction in large deals (deals above $100 million). Heightened geopolitical tensions, US tariff policy and other external headwinds have dampened investor sentiment, resulting in a cautious and wait-and-watch approach,” said Vivek Soni, Partner and National Leader, Private Equity Services, EY.

In terms of the number of deals, pure-play investments declined by 16 per cent, whereas the real estate and infrastructure asset classes declined by 64 per cent year-on-year.

PE/VC exits stood at $1 billion across 18 deals in May. Open market exits accounted for 77 per cent of the total exit value in May 2025 ($797 million).

According to Soni, the bid-ask spread between seller expectations and buyer valuations has not converged meaningfully as yet, dampening PE/VC investment activity.

“Domestically, early signs of positive momentum are emerging through robust GST collections, strengthening of Indian Rupee from the lows seen in the beginning of the year and the recent rate cut by the Reserve Bank of India which is expected to improve liquidity and provide further impetus to deal-making,” he mentioned.

“We expect that these factors collectively are likely to drive a pickup in deal activity in the second half of the year if there is an easing of global uncertainties and geopolitical conflicts and convergence of the bid-ask spread between sellers and buyers valuation expectations. We remain cautiously optimistic,” he added.

—IANS

- IANS