India’s mergers and acquisitions (M&A) and private equity (PE) deal activity surged in the first quarter of 2025, according to Grant Thornton Bharat’s Dealtracker report. The quarter witnessed 669 deals worth USD 29 billion, marking the highest quarterly volumes since Q1 2022 and the highest values since Q3 2022. Domestic transactions led the way, with M&A activity reaching an all-time high. Private equity also saw robust growth, spurred by significant investments in early-stage funding and high-value deals. Despite a downturn in IPO and QIP activity, investor confidence remains strong, positioning 2025 for continued growth.
A Surge in Deal Activity: M&A and PE Lead the Charge
India's corporate landscape is witnessing a dynamic shift, with mergers and acquisitions (M&A) and private equity (PE) investments reaching unprecedented levels in Q1 2025. According to the Grant Thornton Bharat Dealtracker, the first three months of the year saw 669 deals worth USD 29 billion. This represents a substantial increase over previous quarters, signaling robust investor confidence and a vibrant market for strategic investments.
Excluding initial public offerings (IPOs) and qualified institutional placements (QIPs), the quarter saw 636 deals valued at USD 24.4 billion. This marks a 28% growth in deal volumes and a 34% increase in deal values compared to the previous quarter, illustrating the upward trajectory in M&A and PE activity. Year-on-year, deal volumes surged by 43%, while values rose 17%, further solidifying the strength of India’s investment climate.
Record M&A Activity: Domestic Deals Take the Lead
Mergers and acquisitions in Q1 2025 reached an all-time high, with 228 M&A deals worth USD 15.8 billion. This surge was driven by both domestic and inbound transactions, with domestic deals accounting for 72% of the total deal volumes and 62% of the deal values. Three major billion-dollar acquisitions, contributing 41% of the total M&A value, were pivotal in maintaining the momentum in this space.
Notable among these was Bajaj Group’s USD 2.7 billion acquisition of a 26% stake in Bajaj Allianz General and Life Insurance. The deal represents a major consolidation move within India’s thriving insurance sector. Cross-border activity also witnessed significant growth, particularly inbound transactions, which reached an all-time high with 27 deals worth USD 2.7 billion. This surge is indicative of growing investor confidence in India’s domestic markets, especially following significant moves such as Wilmar International’s USD 1.4 billion acquisition of Adani Wilmar's Staples business.
Private Equity Booms: Early-Stage Funding Dominates
Private equity transactions in Q1 2025 saw remarkable growth, recording 408 deals valued at USD 8.6 billion. This marked the highest deal volume since Q3 2022 and a 66% increase in investment values compared to the previous quarter. The rise in deal sizes, from an average of USD 17.4 million to USD 21.1 million, underscores the increasing capital deployment in India’s fast-growing sectors.
Early-stage funding remained the dominant trend in the private equity space, accounting for 44% of total deal volumes. High-profile investments such as Temasek's USD 1 billion stake in Haldiram Bhujiawala Ltd highlighted the continued appetite for growth-stage businesses in India. Additionally, 18 high-value deals (each exceeding USD 100 million) collectively worth USD 3.9 billion, including significant contributions from investors like 100X VC and the Startup India Seed Fund Scheme, reflected a strong capital flow into promising ventures.
IPO and QIP Activity Declines: A Slowdown in Public Offerings
Despite the impressive growth in M&A and PE transactions, IPO and QIP activity in Q1 2025 faced significant challenges. The number of IPOs dropped by 41%, with only 16 IPOs raising USD 2.6 billion, marking the second-lowest quarterly volume in the past seven quarters. This downturn in public offerings highlights weak sentiment in the equity markets, which is largely attributed to volatile market conditions and cautious investor sentiment toward public listings.
However, despite the downturn in IPO and QIP activity, the broader deal environment remains robust. The decline in public offerings has been offset by the strong performance in private investments and strategic corporate acquisitions. This suggests that, while public market sentiment may be tepid, private markets are thriving, driven by confidence in India’s long-term economic growth.
Sectoral Trends: A Shift Toward High-Growth Industries
As India’s investment landscape evolves, investors are increasingly directing funds toward high-growth sectors, including retail, banking, renewable energy, and e-mobility. These sectors are expected to continue attracting significant capital, driven by supportive government policies, economic reforms, and an overall favorable business environment.
The resurgence in PE activity, particularly in early-stage funding and high-value deals, underscores the increasing investor interest in the potential of India’s emerging industries. The continued momentum in M&A and PE deals suggests that companies are actively seeking strategic growth opportunities, with many opting for acquisitions as a way to expand their market share or enter new sectors.
Looking Ahead: 2025’s Strong Outlook for India’s Investment Landscape
The Q1 2025 data signals a promising start to the year, setting the stage for a strong investment climate in the months ahead. With a sustained rise in M&A and PE activity, alongside continued growth in strategic investments, India’s business environment remains favorable for both domestic and international investors. The ongoing surge in cross-border deals, as well as robust activity in high-growth sectors, reinforces the view that investor confidence in India’s market remains strong.
While the IPO and QIP space may remain sluggish in the near term, the overall deal environment suggests a healthy appetite for strategic investments. As 2025 progresses, India’s economic reforms, sector-focused policies, and growing investor interest are expected to keep the momentum going, positioning the country as a leading hub for mergers, acquisitions, and private equity investments.
Conclusion: A Year of Strategic Investments and Market Growth
In conclusion, Q1 2025 has shown that India’s mergers and acquisitions, as well as private equity transactions, are thriving, driven by investor confidence and strategic growth opportunities. The country’s investment landscape remains robust, with strong deal activity in high-growth sectors and a promising outlook for the rest of the year. While IPOs and QIPs may face short-term challenges, the overall market is poised for continued success, with domestic and international players eyeing the vast opportunities that India offers. For investors, 2025 presents an exciting year of growth and strategic investments.
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