India witnessed a strong rebound in private equity activity during the fourth quarter of 2025, with investments hitting $3.7 billion, marking a 44.3% increase from the previous quarter. According to a report by the London Stock Exchange Group (LSEG), total equity investments in Q4 reached the highest quarterly level since Q4 2024.
Despite the late-year surge, full-year private equity investments saw a 23.7% year-on-year decline to $12.1 billion, indicating the lasting impact of a cautious investment climate for most of the year, as per the report. Vianca Sanchez, Analyst at LSEG Deals Intelligence, noted that while investment activity slowdown was widespread, technology-driven sectors remained relatively resilient, attracting a significant portion of private equity capital.
In 2025, internet-specific and computer software companies collectively drew $6.7 billion, accounting for over half of the total PE deployment, the report highlighted. However, investment in these sectors moderated by 1.9% year-on-year, reflecting a rise in investment selectivity.
The report also mentioned that fundraising in the Indian private equity sector dropped to $3.8 billion in 2025, the lowest since 2017. This subdued fundraising trend in India mirrored a global slowdown in private equity capital formation throughout the year. Cumulative capital raised since 2022 amounted to approximately $28.5 billion, which could potentially boost deal activity as investor confidence strengthens and valuation expectations adjust.
Another recent report from a business analytics firm projected a stable macroeconomic environment and emphasized that India’s forthcoming growth wave would be driven by digitized logistics, trusted data, clean energy, and city vitality to enhance productivity. The report highlighted emerging sectors like AI, green ports, and quick commerce that are poised to enhance competitiveness and foster inclusive growth opportunities across various regions and industries. It also underscored the importance of attracting private capital, enhancing human capital, and leveraging policy support to drive sustainable transformation.
