New Delhi – India’s mergers and acquisitions (M&A) and private equity (PE) landscape witnessed a dramatic rebound in the first quarter of 2025, with total deal value surging 204 per cent year-on-year to $5.3 billion across 67 transactions, according to a report by Grant Thornton Bharat released on Thursday.
This represents a significant jump in both volume and value from Q4 2024 and Q1 2024, with 65 of the 67 deals alone contributing $5 billion. The quarter marked a 25 per cent increase in deal volume and a substantial rise in overall investment value.
Q1 2025 saw six high-value deals exceeding $100 million each, aggregating $4.3 billion — a stark leap from the $534 million recorded across four similar deals in the preceding quarter. This resurgence underscores growing investor confidence, positioning India as a favored hub for capital deployment amid continuing global economic uncertainties.
“Despite global headwinds and capital market volatility, India’s growth trajectory remains promising,” said Vishal Agarwal, Partner at Grant Thornton Bharat. “With the 2025 Budget focusing on regulatory ease and inclusive growth, we expect continued capex momentum, fueling consolidation and fresh capital inflows.”
Agarwal noted that while M&A and PE activity remained somewhat measured, early-stage investments and buyouts drove most of the action. IPO activity, however, appeared to be delayed slightly. Key areas of investor interest continue to be financial services, particularly asset-backed credit, fee-based wealth and fund management, and insurance.
M&A Hits Record Highs
India’s M&A segment alone recorded 28 deals totaling $4 billion — the highest ever quarterly volume and the third-largest value on record. The quarter was defined by increased average deal sizes, driven by four major transactions worth $985 million and a landmark $2.8 billion acquisition by the Bajaj Group, which picked up a 26 per cent stake in Bajaj Allianz General and Life Insurance.
Domestic transactions dominated, making up 71 per cent of deal volumes and 86 per cent of total M&A value. Cross-border M&A activity also saw renewed momentum, particularly in deal volume, aided by a recovery in value since Q2 2024. While outbound M&A remained modest, smaller consolidations in the UAE and North America signaled rekindled overseas interest. Notably, the top five M&A deals accounted for 94 per cent of the total deal value, reflecting a concentration of capital in high-impact transactions.
PE Remains Resilient
Private equity activity in Q1 held steady with 37 deals amounting to $1 billion, reflecting a slight 2 per cent rise in value over the previous quarter. Though deal momentum has moderated following a year-long surge from Q3 2023 to Q3 2024, the credit sector stood out as a stronghold. Banking, NBFCs, and Fintech collectively attracted 78 per cent of the total PE investment value.
The top five PE deals made up 74 per cent of total investments, led by Bain Capital’s $504 million acquisition of an 18 per cent stake in Manappuram Finance Ltd. While investors adopted a more selective approach, India’s credit-focused institutions continue to draw substantial interest, reinforcing the country’s status as a stable and attractive PE destination.
Capital Markets Subdued
In contrast to the buoyant dealmaking environment, capital markets saw a slowdown. IPO activity in Q1 2025 dropped for the first time since Q2 2023, and only two Qualified Institutional Placements (QIPs) raised a combined $316 million. This marked the second-lowest QIP performance by volume and value since Q2 2023.
According to the report, the dip in primary market activity suggests companies are taking a cautious, wait-and-watch stance amid evolving market conditions, potentially deferring listings and fundraising until more favorable conditions emerge. (Source: IANS)
