Is India Inc. Preparing for a Deal Surge as Global Challenges Abate?

New Delhi, July 9 (NationPress) Despite a lackluster dealmaking climate in Q2 2025 due to global uncertainties, emerging signs of resilience are visible, particularly with foreign investors spearheading inbound M&A activity and the public markets indicating a potential revival, as detailed in a report by Grant Thornton released on Wednesday.

With geopolitical challenges diminishing, it is anticipated that deal momentum will gain traction in the latter half of 2025, supported by India’s robust macroeconomic fundamentals and strong investor interest in rapidly growing sectors, according to the report.

The second quarter of 2025 recorded a total of 582 transactions (including IPOs and QIPs) valued at $17 billion, alongside 554 deals worth $12.8 billion. This represented a 13 percent decrease in volume, largely attributed to ongoing global volatility—including the Iran-Israel conflict, policy uncertainties in the US, the Russia-Ukraine war, and elevated gold prices—which fostered increased caution among investors, the report notes.

Shanthi Vijetha, Partner, Growth, Grant Thornton Bharat, stated, “The second quarter of 2025 was characterized by a cautious investment climate shaped by global uncertainties. Even amidst this slowdown, the consistent momentum in private equity investments, the rise of new unicorns, and a promising increase in public market activities towards the end of the quarter are positive signals.”

“This quarter demonstrated stable activity in sectors such as banking and infrastructure, indicating ongoing investor confidence in India’s long-term growth narrative. Looking ahead, we are optimistic that relieving external pressures coupled with strong domestic fundamentals will enhance deal activity in the months to come,” Vijetha emphasized.

Private equity activity exhibited relative strength in Q2 2025, with 357 deals valued at $7.4 billion, marking the second-highest volume since Q4 2022. However, deal values saw a quarter-on-quarter decline, reflecting the absence of high-value investments that characterized Q1.

M&A activity in Q2 2025 continued its downward trend, with 197 deals amounting to $5.4 billion. Notably, the quarter included a single billion-dollar transaction—Sumitomo Mitsui Banking Corporation’s $1.57 billion investment in YES Bank, which significantly contributed to the total deal value. The banking sector emerged as the leading contributor, accounting for nearly half of the deal value through three high-value transactions. Furthermore, Zaggle Prepaid Ocean Services made headlines with a bold domestic acquisition spree across IT, banking, and media, demonstrating a unique consolidation strategy amid overall market softness, as indicated by the report.

Public market fundraising remained cautious in Q2 2025, continuing a downward trend in IPO activity for the third consecutive quarter. Nevertheless, June showed signs of recovery, achieving the second-highest monthly IPO volumes and values in 2025.

In terms of QIP activities, there were 16 issuances totaling $2.2 billion, closely mirroring the previous quarter. The banking sector was the primary driver, accounting for 49 percent of QIP proceeds, with six banks collectively raising $1.1 billion, highlighting sustained institutional investor interest in the financial sector, the report concluded.