Indian PE-VC Exits Face Steep Decline
India's private equity and venture capital exits fell 40% to $18.8 billion in the fiscal year ending March 2026. This pullback, driven by market volatility and investor caution, marks a significant drop from the $26.1 billion achieved across 292 deals in the prior year.
Major Deals and Valuation Hurdles
Key transactions included global investment firm KKR's $1.4 billion sale of its 46% stake in JB Chemicals to Torrent Pharmaceuticals, and Kedaara Capital's $1.2 billion divestment of a 14.2% stake in supermarket chain Vishal Mega Mart. The Ontario Teachers Pension Plan also exited its stake in Sahyadri Hospitals. Geopolitical tensions have complicated valuations, creating hesitation for buyers and sellers, according to Prem Barthasarathy, founder of Pontaq Ventures. "Buyers feel like the valuations have corrected too much and sellers feel like it can go down further. This is leading to reduced activity," he said.
IPO Market Challenges Limit Exit Options
The weak IPO market has also limited exit avenues, further slowing deal flow. Overall PE-VC funding in FY26 dipped 10% to $33.9 billion across 1,259 deals, down from $37.8 billion in FY25.
Mixed Sector Performance, Fewer Mega Deals
Artificial intelligence stood out, attracting $4 billion in investment, a substantial increase from the previous year. However, healthcare funding dropped significantly from $8.6 billion to $3.8 billion, and e-commerce funding fell from $4.8 billion to $3 billion. Mega deals, valued at over $100 million, saw a marked decrease, with $20 billion raised across 68 deals in FY26 compared to $26 billion across 96 deals in FY25.
Future Funding Outlook
Arun Natarajan, Founder of Venture Intelligence, expects a slowdown in pre-IPO and late-stage funding, especially for tech startups, due to IPO market challenges. Investors may also show caution toward sectors whose raw material supplies are impacted by the ongoing Gulf War, such as quick-service restaurants and semiconductors.