Key Takeaways
- • PE/VC investments in India contracted sharply to US$20.5 billion across 604 deals in 1H2026, representing a 36% year-over-year decline from US$31.8 billion in 1H2025 and marking the lowest quarterly activity in six years for Q2 2026.
- • Growth investments dominated deal activity at US$7.0 billion, followed by buyout investments at US$5.4 billion, while deal volume fell 18% year-over-year despite sector diversification.
- • Real estate emerged as the leading sector with US$4.1 billion in investments, trailed by technology at US$3.1 billion; however, real estate and infrastructure investments declined 47% year-over-year to US$6.3 billion.
- • PE/VC exits declined 29% year-over-year to US$9.4 billion in 1H2026, signaling reduced liquidity events and exit opportunities in the Indian market.
- • Datacenters and allied sectors demonstrated resilience, attracting approximately US$45.3 billion in cumulative commitments and investments across 86 deals between 2021 and June 2026, with investment activity peaking in 1H2026.
Summary
India's private equity and venture capital market experienced a significant contraction in the first half of 2026, according to the EY-IVCA monthly PE/VC roundup released on July 31, 2026. Total PE/VC investments reached US$20.5 billion across 604 deals, representing a substantial decline from prior periods. The year-over-year comparison proved particularly striking: 1H2026 investments fell 36% compared to 1H2025's US$31.8 billion, while deal count dropped 18% from 734 transactions to 604. Vivek Soni, Partner and National Leader of Private Equity Services at EY India, characterized the period as challenging, noting that 1H2026 also represented a 29% decline relative to 2H2025's US$29.0 billion. Q2 2026 specifically recorded the lowest quarterly PE/VC investments in value terms over the preceding six years.
Pure-play PE/VC investments—excluding real estate and infrastructure allocations—totaled US$14.2 billion in 1H2026, down 29% from US$20.0 billion in 1H2025 and 26% compared to 2H2025's US$19.0 billion. The real estate and infrastructure asset class bore the brunt of the contraction, declining 47% year-over-year to US$6.3 billion from US$11.8 billion, with deal volume in this category falling 44% year-over-year. On a sequential basis, real estate and infrastructure investments fell 37% compared to 2H2025.
From an investment strategy perspective, growth investments led PE/VC activity in 1H2026 at US$7.0 billion, while buyout investments contributed US$5.4 billion. Sector performance varied significantly: real estate dominated at US$4.1 billion, followed by technology at US$3.1 billion. Exit activity also weakened substantially, with PE/VC exits declining 29% year-over-year to US$9.4 billion in 1H2026, suggesting reduced liquidity opportunities and successful exit realization during the period.
A notable bright spot emerged in the datacenter sector and allied infrastructure plays. Between 2021 and June 2026, datacenters and related sectors attracted approximately US$45.3 billion in cumulative commitments and investments across 86 deals, with investment activity peaking during 1H2026. This concentration reflects sustained institutional interest in data infrastructure despite broader market softening, underscoring the sector's strategic importance to India's digital economy expansion and attracting consistent capital despite headwinds affecting other asset classes.
Pure-play PE/VC investments—excluding real estate and infrastructure allocations—totaled US$14.2 billion in 1H2026, down 29% from US$20.0 billion in 1H2025 and 26% compared to 2H2025's US$19.0 billion. The real estate and infrastructure asset class bore the brunt of the contraction, declining 47% year-over-year to US$6.3 billion from US$11.8 billion, with deal volume in this category falling 44% year-over-year. On a sequential basis, real estate and infrastructure investments fell 37% compared to 2H2025.
From an investment strategy perspective, growth investments led PE/VC activity in 1H2026 at US$7.0 billion, while buyout investments contributed US$5.4 billion. Sector performance varied significantly: real estate dominated at US$4.1 billion, followed by technology at US$3.1 billion. Exit activity also weakened substantially, with PE/VC exits declining 29% year-over-year to US$9.4 billion in 1H2026, suggesting reduced liquidity opportunities and successful exit realization during the period.
A notable bright spot emerged in the datacenter sector and allied infrastructure plays. Between 2021 and June 2026, datacenters and related sectors attracted approximately US$45.3 billion in cumulative commitments and investments across 86 deals, with investment activity peaking during 1H2026. This concentration reflects sustained institutional interest in data infrastructure despite broader market softening, underscoring the sector's strategic importance to India's digital economy expansion and attracting consistent capital despite headwinds affecting other asset classes.
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