Global investors are increasingly questioning how private Indian companies are being valued, creating an opening for consulting firms to step in with independent valuation advisory services.
When Jamil Khatri launched a valuations practice at Uniqus Consultech last week, the firm’s sixth service line, the timing was not incidental. Across the 300-plus clients the former KPMG executive had built the firm around since founding it in 2022, the same need kept resurfacing.
“Sponsors reporting to LPs and investors, or corporates, are asking for faster turnaround, greater precision, and a more transparent methodology,” Khatri told Mint. “The volume and complexity of valuation requirements have grown considerably.”
Global limited partners are increasingly identifying Indian private-market valuations as a key roadblock to increased deployment in the country.
The pressure is most acute in sectors where capital has been most concentrated. Nearly three-quarters of private equity deployment in India between 2021 and 2025 flowed into technology, financial services, IT services, pharmaceuticals, and consumer goods, contributing to valuation pressure.
In a survey of more than 50 global limited partners conducted by McKinsey and the Indian Venture and Alternate Capital Association, 76% ranked India among their top three investment destinations in Asia-Pacific, the highest of any market in the region.
Yet the same survey found that valuations were among the weakest factors assessed, ranking last, even among investors who allocate 70% or more of their Asia-Pacific private capital to India. Even investors allocating about 30% or less of their Asia-Pacific capital to India flagged valuations as one of the top six weaknesses for the country, alongside governance, currency risk and tax regime.
“Usually, factors like valuations, foreign exchange and taxation, have a direct impact on underwriting and affect returns,” said Kunal Sood, partner at Pantheon’s Asia investment team, a UK-based investment firm that has backed domestic private equity players like ChrysCapital, Kedaara and Multiples.
Reality checks emerge
Recent developments around firms hitting the public markets have also highlighted the gap that can arise between private-market valuations and public-market pricing.
PhonePe, the payments giant backed by Walmart, is expected to go public at a valuation of around $10.5 billion, below the $14 billion valuation it commanded in a private funding round led by General Atlantic last year.
Fractal, the AI analytics firm, debuted on public markets in February at about $1.6 billion, a markdown from the roughly $2.4 billion valuation it secured in a private sale in July 2025.
“Valuations in India have consistently been high,” said Vivek Pandit, senior partner at McKinsey, while sharing the recent report at a press briefing on the sidelines of the IVCA Conclave.
The concern is not just the level of valuations but also the metrics underpinning them.
“Evaluators today need to pay more attention to higher risk in valuations and focus on sustained metrics,” Sood said. “If companies are being valued on Ebitda, it should be based on sustained Ebitda factoring for the current environment. The same applies to ARR (Annual Recurring Revenue).”
As investor scrutiny grows, consulting firms say demand for independent valuation perspectives is rising.
Deloitte India’s Pinkesh Billimoria said the questions clients are asking have evolved significantly. “The question has moved from ‘what is the number’ to ‘what is driving the number, and will those drivers endure’,” he said.
Inputs once accepted at face value, such as transaction multiples, forward revenue assumptions and peer benchmarks, are now routinely challenged. This has trickled down to how even general partners assess deals.
- Global investors view high valuations of Indian startups as a major barrier to investment.
- Nearly 76% of LPs favour India, yet they rank its valuations very poorly.
- Recent IPOs like Fractal have seen significant markdowns from prior private funding rounds.
- Consulting firms are launching specialized practices to provide independent, transparent valuation audits.
- Investors now prioritize 'sustained Ebitda' over aggressive, short-term revenue growth metrics.
Pressure to generate exits
“This has changed the way deals are being evaluated across sectors,” one of the three GP fund managers Mint spoke to said on the condition of anonymity. “These disruptions have become an important line item in deal evaluations,” the person added.
With several fund managers at the end of their fund lifecycles, there is also pressure to generate returns, as paying rich multiples for companies at the time of deployment has made it challenging for investors to exit at a better valuation, the second person said. “For deals in the current vintage, this has led to more scrutiny on sustained metrics beyond euphoric valuations that can withstand disruptions during the holding period.”
Deloitte’s Billimoria added that there is a clear shift toward seeking independent valuation perspectives beyond the auditor’s assessment. “Advisory boards of funds looking for unbiased external perspectives, LPs driven by heightened governance standards and transparency expectations, and broader alignment with global investor reporting and valuation best practices,” Billimoria said.
Firms are also evolving their valuation analysis approach.
Billimoria said Deloitte now places greater emphasis on factors such as a company’s ability to scale, regulatory hurdles, competitive intensity, and readiness for follow-on capital, in addition to traditional considerations such as exit timelines.
For Nexus Venture Partners and Sorin Investments-backed Uniqus, AI and proprietary tech will automate data gathering, peer selection, and sensitivity modelling.
Khatri, however, added that the firm will maintain “the primacy of professional judgement at the point of conclusion,” in all cases.