India’s dealmaking environment softened sharply in the second quarter of 2025, with the total transaction value plunging 48% quarter-on-quarter to $12.8 billion across 554 private equity and M&A deals, even as deal volume surged 23% over the same period last year.
The sharp drop in value stemmed from a near-collapse in large-ticket M&A activity. The country recorded just one billion-dollar transaction in Q2, Sumitomo Mitsui Banking Corporation’s $1.6-billion acquisition of a 20% stake in YES Bank, compared with four such deals in Q1.
According to Grant Thornton Bharat’s Q2 Dealtracker report, domestic M&A value plunged 81% quarter-on-quarter, while outbound deal value fell 74%. Inbound M&As, however, remained relatively steady, pointing to sustained interest from global investors in India’s long-term growth story amid geopolitical uncertainty, including the Iran-Israel conflict and policy volatility in the US.
There were 197 M&A deals worth $5.4 billion during the quarter, the lowest since Q2 2023. Banking dominated the M&A landscape, contributing 45% of the total deal value via three transactions over $100 million.
Despite the subdued environment, private equity activity remained relatively resilient. While no billion-dollar PE deals were reported this quarter, 18 high-value transactions exceeding $100 million contributed $4.6 billion, or 62% of the total PE value.
The largest PE transaction was the $862-million investment by Warburg Pincus and Abu Dhabi Investment Authority in IDFC FIRST Bank. Other standouts included IRB InvIT’s $570-million bet on three highway projects and Citykart Retail’s $68-million Series B round, underlining continued appetite for financial services, infrastructure, and value retail.
The PE landscape in 2025 has focused on sectors with strong fundamentals, said Vishal Agarwal, partner and private equity group & deals tax advisory leader, Grant Thornton Bharat.
BFSI, infrastructure, and retail led activity in H1, marking a shift from 2024’s emphasis on telecom and healthcare. The trend reflects a move towards stable, cash-generating sectors, with exits continuing to be a key theme, he added.
Public market activity showed early signs of a revival after three subdued quarters. IPO fundraising stood at $1.9 billion across 12 listings, down 26% by value from Q1. However, June alone accounted for $1.3 billion of this amount, driven by high-profile listings such as Leela Hotels ($407 million), Ather Energy ($343 million), and Aegis Vopak Terminals ($326 million), making it the second-best month for IPO activity this year.
“Despite the slowdown, the emergence of new unicorns, resilient PE appetite, and a rebound in public markets by June are encouraging signs,” said Shanthi Vijetha, partner-growth at Grant Thornton Bharat.
From a sectoral standpoint, retail and consumer-led deal volumes, contributing 21% of the transactions, though deal value crashed 78% from Q1 due to the absence of billion-dollar deals like Temasek’s $1-billion bet on Haldiram and Wilmar-Adani Wilmar’s $1.4-billion transaction.
Banking and financial services accounted for the highest deal value, $4.5 billion across 73 deals, marking its highest volume and second-highest value since Q3 2022. Infrastructure followed with $1.2 billion in PE-led activity, including two large InvIT transactions.
The IT and ITeS sector recorded 58 deals, but the value fell 57% from the previous quarter. Manufacturing, meanwhile, achieved its highest-ever quarterly deal volume, although deal value declined 24% sequentially.
“With geopolitical volatility expected to stabilise in H2, India is well-placed to see a pickup in deal activity, particularly in banking, infra, and scalable consumer businesses,” Vijetha added.
