Will Private Equity Investments in India Revive in the Second Half of 2025?
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Synopsis
A new report suggests that private equity investments in India could see a resurgence in the second half of 2025. With market conditions stabilizing and outbound M&A activity on the rise, there are signs of optimism among investors. Discover how these trends could reshape the investment landscape in the coming years.
Key Takeaways
- Private equity activity is projected to revive in the second half of 2025.
- Market valuations are stabilizing, enhancing exit opportunities.
- Outbound M&A activity is on the rise, indicating corporate confidence.
- The emergence of unicorns reflects selective investor optimism.
- Banking and Financial Services continue to lead in deal values.
New Delhi, June 11 (NationPress) Private equity (PE) activities in India are projected to experience a revival in the second half of 2025 as market valuations begin to stabilize and exit opportunities enhance, according to a recent report released on Wednesday.
In May, India witnessed a total of 179 deals worth $4.5 billion. When excluding IPOs and QIPs, the market recorded 175 transactions valued at $4.2 billion, indicating a 17 percent decline in volume and a slight 4 percent drop in value compared to April, as per the report from Grant Thornton Bharat.
Furthermore, the increase in outbound M&A activity reflects a growing corporate confidence in global expansion and strategic diversification.
“May saw a slowdown in overall deal activity due to a subdued private equity sentiment. The emergence of two unicorns and a rise in Corporate India's outbound transactions suggest a positive outlook for deals,” stated Shanthi Vijetha, Partner, Growth at Grant Thornton Bharat.
“We anticipate a build-up in deal momentum during the second half, especially with a revitalized IPO market on the horizon,” she added.
The Mergers and Acquisitions (M&A) activity remained consistent in May, recording 68 deals valued at $2.4 billion, which represents a 75 percent increase in deal value compared to April, even with a slight 1 percent decrease in volume.
Notably, outbound M&A activity surged with 15 deals finalized compared to just two in April, highlighting renewed confidence among Indian corporates pursuing cross-border growth after nearly a decade.
The private equity sector found a silver lining with the rise of two unicorns, Drools Pet Foods and JSW One Platforms, showcasing selective optimism among investors.
Capital markets remained muted in May, with only two IPOs generating $0.3 billion, mirroring last month’s lackluster performance.
The Banking and Financial Services sector led the deal values, accounting for 42 percent of the total, driven by Sumitomo Mitsui's $1.6 billion investment in YES Bank.
The Retail and Consumer sector sustained strong deal activity, spurred by early-stage VC investments and significant funding in fashion retail, highlighted by Citykart's $68 million raise, according to the report.
Point of View
It's vital to recognize the evolving landscape of private equity in India. The anticipated revival in 2025 reflects broader economic trends and the resilience of Indian corporates. As we navigate these changes, our focus remains on fostering an environment conducive to growth and investment.
NationPress
13/06/2025
Frequently Asked Questions
What is the projected revival timeline for private equity investments in India?
Private equity investments in India are expected to revive in the second half of 2025.
What are the factors contributing to this anticipated revival?
Stabilizing market valuations and improved exit opportunities are key factors contributing to the expected revival.
What recent trends have been observed in M&A activity?
There has been a notable increase in outbound M&A activity, signaling renewed confidence among Indian corporates.
How did the private equity sector perform recently?
The sector saw the emergence of two unicorns, indicating selective optimism among investors.
Which sectors dominated deal values in May?
The Banking and Financial Services sector dominated, contributing 42 percent of the total deal values.
