Private equity deals in India are taking significantly longer to close, with transaction timelines stretching from the earlier three-four months to as long as six-nine months. Geopolitical uncertainty, supply-chain disruptions and the emergence of new investment themes such as the AI value chain, defence manufacturing and data centres are forcing investors to spend more time evaluating risks, testing business assumptions and negotiating valuations, investment bankers, PE funds and consultants said.

A recent acquisition of an industrial company, yet to be announced, took nearly six months to conclude after repeated rounds of due diligence on demand, margins and order-book visibility before the buyer and seller could agree on valuation. In another transaction involving a defence components manufacturer, extensive checks on manufacturing standards, quality controls and regulatory compliance prolonged negotiations before a consortium of private equity and strategic investors committed capital, according to a report by The Financial Express.

“The deal cycle varies across industries, but in many cases we have seen it extend by as much as six months over earlier timelines,” said Vineet Satija, partner and head of investment banking at PwC India. He attributed the delays partly to the widening bid-ask spread between buyers and sellers.

The uncertainty triggered by the West Asia conflict and continuing supply-chain disruptions has made forecasting business performance more difficult. Higher freight and insurance costs, volatile energy prices and uncertainty over global demand have made investors more cautious.

“Promoters are not able to predict with confidence what will happen over the next one to three years or how much better they can perform,” said Rohit Mantri, managing director and co-head of private equity at Motilal Oswal Alternates.

At the same time, investors are venturing into sectors with relatively limited operating history.

“New sub-sectors such as the AI value chain, defence components and data centres require investors to spend more time understanding business models and evaluating risks before committing capital,” Mantri said.

Eshwar Karra, deputy managing director at Kotak Alternate Asset Managers, said emerging themes such as climate transition and digital infrastructure continue to attract investor interest, but some areas still require greater maturity and visibility before large-scale capital deployment.

He said investors are placing greater emphasis on cash-flow visibility, governance standards and downside protection. While volatile public markets and a narrower IPO window have increased demand for private capital, they have also enabled investors to negotiate stronger deal structures and better risk-adjusted returns.