The value of investments was USD 1.2 billion in the January-March quarter of 2013 through 107 deals.
"If the stock market rally and the PE investment flows in the first quarter of 2014 are an indication of how the rest of the year will play out, then the Indian markets have every reason to cheer," PwC India Leader, Private Equity and Transaction Services Sanjeev Krishan said.
The benchmark 30-share Sensex gained 5.7 per cent in the three months ended March 31. Foreign investors pumped in over Rs 1 lakh crore in Indian securities since Narendra Modi was named the Bharatiya Janata Party's prime ministerial candidate in September on hopes of a stable and reforms-oriented government.
The stock index climbed to a record close yesterday after Modi led the BJP to victory on its own in the just-concluded Lok Sabha elections, paving the way for the National Democratic Alliance to govern the country.
The information technology (IT) and IT-enabled services sector led in terms of value and volume, attracting USD 908 million of investments, followed by the energy sector with USD 414 million, according to the PwC MoneyTree India report, a quarterly study of private equity investment activity based on data from Venture Intelligence.
"It was a positive quarter with general buoyancy in the investment outlook. With the formation of a new government around the corner, future flows (for the rest of this year and the next few years) will hinge upon the stability of the new government and its stand on various policies and regulatory matters," Krishan said.
Mumbai topped in terms of PE investments (by both value and volume), with USD 942 million from 26 deals.
The National Capital Region got the second-highest level of funding at USD 531 million.
There was a spurt in investments in cities such as Jaipur (USD 47 million) and Faridabad (USD 20 million) this quarter.
Tier-2 and tier-3 cities such as Ahmedabad, Madurai and Pune got investments of over USD 10 million.