India’s PE Comeback: Why 2025 will be the Year of Private Equity Resurgence

After three consecutive years of declining private equity (PE) activity, 2025 is shaping up to be a turning point for India. The first four months of the year already show PE deal activity (excluding real estate and infrastructure) surpassing 50 per cent of 2024’s full-year figures. On an annualised basis, both the number and value of deals are outpacing last year’s totals.

Excluding investments in Real estate and Infra sectors (Source: Equirus Capital)

India: The Global PE Magnet

India is in a rare sweet spot where demand and supply dynamics are aligning perfectly to drive a revival in PE investments.

On the demand side, India benefits from improved visibility of exit opportunities, consistently strong investment returns, macroeconomic stability amid global uncertainty, and accelerating consumption and digital adoption.

Global economic headwinds — including slowing growth in the US and Europe, inflationary concerns, and a weakening dollar — have only made India more attractive. With over $2.5 trillion in global dry powder and limited deployment options elsewhere, PE funds are increasingly eyeing India.

Fundraising Trends Reflect This Confidence

Despite a global slowdown in new fund launches (US PE funds dropped from 685 in 2023 to 316 in 2024), India saw a surge. The country raised a record $10.4 billion in PE capital in 2024 — up 63 per cent from the previous year — even as the number of new funds dropped from 101 to 70.

According to Equirus estimates, around $20 billion in India-focused dry powder is ready to be deployed. With performance fees tied to deployment, this is likely to trigger a fresh wave of investments.

Sectoral Momentum

PE appetite in India remains strong across:

• Healthcare: Boosted by medtech innovation and CDMO growth

• Financial services: NBFCs are regaining traction, especially in housing finance and loans against property

• Consumer & retail: Set for recovery with D2C and premium brands scaling up

• Commercial real estate: Benefiting from economic tailwinds

Buyouts are expected to dominate, with GPs looking to create long-term value. Consumer tech, quick commerce, and profitability-focused businesses will likely attract capital.

Exits Drive Confidence

Global PE majors are bullish on India because it offers multiple viable exit routes: secondary sales, strategic acquisitions, and IPOs.

India's IPO boom in 2024:

• 92 mainboard IPOs raised Rs 1.5 lakh crore (around $18 billion)

• PE exits jumped to 175 deals worth $20 billion (up from 120 deals in 2023)

• Public market exits accounted for 85 per cent of total exit value (up from 67 per cent)

This surge in capital market activity has reinforced India’s reputation as a favorable exit environment — a key confidence booster for global GPs.

In comparison, China saw a dramatic drop: only 21 PE exits worth $10 billion in 2024, down from $65 billion across 117 exits in 2023. Meanwhile, US exit activity remained muted.

Supply Side Reality: IPO Uncertainty Fuels PE Deals

Volatility since late 2024 — triggered by global events and domestic GDP slowdown — has shaken Indian stock markets. As a result, many IPOs worth billions have been paused, with companies awaiting stability.

This pause has opened the door for PE funds. With IPOs on hold, companies looking for growth capital are now turning to private markets, offering fresh opportunities for PE firms to step in and scale promising ventures.

The Bottom Line

With strong demand, ample dry powder, sectoral tailwinds, and IPO bottlenecks driving firms toward private funding, 2025 is poised to mark a major comeback for private equity in India. For PE funds, it's time to deploy. For businesses, it’s time to negotiate.