After her second divorce, Lakshmi chose not to remarry. She was linked romantically to several co-stars and directors in gossip columns, but she consistently denied these rumors. In the 1990s and 2000s, she lived with her daughter Aishwarya (who also became an actress) and was reportedly in a long-term, low-profile relationship with a Chennai-based businessman. She never confirmed this publicly, maintaining that her primary relationships were with her children and her work.