India Sees a 204% Surge in M&A and PE Deals to $5.3 Billion in Q1: Report
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Synopsis
India's M&A and PE landscape in Q1 2025 experienced a significant rebound, with 67 deals totaling $5.3 billion. This marked a robust increase in both volume and value compared to previous quarters, highlighting renewed investor confidence in India's market amidst global uncertainties.
Key Takeaways
- 67 deals worth $5.3 billion in Q1 2025.
- 204% rise in total deal value compared to Q1 2024.
- 28 M&A deals valued at $4 billion, hitting record volumes.
- Private equity activity remained stable with 37 deals worth $1 billion.
- Continued interest in financial services and credit-oriented sectors.
New Delhi, April 24 (NationPress) India’s mergers and acquisitions landscape in Q1 2025 showcased a remarkable recovery in investor confidence, with 67 transactions totaling $5.3 billion, indicating a significant increase in both the number and value of deals compared to Q4 2024 and Q1 2024, as per the report by Grant Thornton Bharat released on Thursday.
This impressive growth, which includes 65 transactions worth $5 billion, signifies a 25% rise in deal volume and an astounding 204% increase in value compared to the same quarter last year.
The quarter also recorded six high-value deals exceeding $100 million, amounting to $4.3 billion, a substantial leap from the $534 million generated by four similar deals in the previous quarter. These patterns underscore a revitalized investor confidence, establishing India as a prime location for capital investments amid ongoing global uncertainties.
Vishal Agarwal of Grant Thornton Bharat stated: "Despite facing global challenges and volatility in capital markets, India’s growth path remains optimistic. With the Budget 2025 focusing on regulatory simplification and collaborative growth, we anticipate a build-up in capital expenditure momentum, which will drive consolidation and fresh capital inflows."
"While M&A and PE activities have seen some moderation, they remain intriguing with early-stage investments and buyouts dominating the majority of transactions, although discussions surrounding IPOs appear to be delayed by several months. We foresee continued interest in the financial services sector, particularly in granular and asset-backed credit, fee-based wealth management, and insurance sectors," he added.
The M&A segment experienced a significant upswing, witnessing 28 transactions valued at $4 billion, achieving the highest deal volumes ever recorded and ranking as the third-highest quarterly value on record.
The quarter was characterized by larger average deal sizes, driven by four high-value transactions totaling $985 million and a monumental multibillion-dollar deal in the insurance sector: Bajaj Group’s acquisition of a 26% stake in Bajaj Allianz General and Life Insurance for $2.8 billion. Domestic M&A transactions continued to lead, making up 71% of deal volumes and 86% of values, while cross-border transactions reached a new high in volumes, buoyed by a resurgence in value from Q2 2024.
Although outbound activity was limited, small-scale consolidations in the UAE and North America hinted at renewed international interest. Notably, the top five M&A transactions accounted for 94% of the total deal value, underscoring the active dealmaking environment.
The private equity (PE) sector in Q1 2025 remained stable, with 37 deals valued at $1 billion—a slight 2% increase in value from the previous quarter, maintaining consistent volumes. While overall activity has cooled following a year-long growth streak from Q3 2023 to Q3 2024, persistent interest in India’s credit ecosystem stood out, with Banking, NBFC, and Fintech areas comprising 78% of the total deal value. This trend indicates investors' heightened focus on credit-oriented institutions, even as dealmaking becomes more cautious. Significantly, the top five PE transactions represented 74% of total investments, led by Bain Capital’s $504 million acquisition of an 18% stake in Manappuram Finance Ltd. Despite adopting a more selective investment strategy, India continues to draw considerable attention as a stable and promising private equity market.
The capital markets experienced a lackluster quarter in Q1 2025, marked by limited IPO activities—the first decline since Q2 2023—and only two QIP issuances totaling $316 million. Despite a robust performance last year, QIP activity recorded its second-lowest quarterly performance in both volume and value since Q2 2023, reflecting a cautious approach from issuers amid shifting market conditions. The overall slowdown in primary market activity suggests that firms are adopting a wait-and-see strategy, possibly postponing listings and capital raises in anticipation of more favorable market environments, the report noted.
