Although India Inc. witnessed a subdued dealmaking environment in Q2 2025 due to global uncertainty, signs of resilience are emerging, especially with foreign investors taking the lead in inbound M&A and public markets showing signs of revival, according to a Grant Thornton report released on Wednesday.
As geopolitical headwinds ease, deal momentum is expected to pick up in the second half of 2025, buoyed by India’s strong macroeconomic fundamentals and investor interest in high-growth sectors, the report states.
A total of 582 transactions (including IPOs and QIPs) valued at $17 billion, and 554 deals worth $12.8 billion were recorded in the second quarter of 2025. This marked a 13 per cent decline in volumes that was primarily driven by continued global volatility — including the Iran-Israel conflict, policy uncertainty in the US, the Russia-Ukraine war, and elevated gold prices — which led to heightened caution among investors, the report states.
Shanthi Vijetha, Partner, Growth, Grant Thornton Bharat, said, “The second quarter of 2025 was marked by a cautious investment environment influenced by global uncertainties. Despite the slowdown, the sustained momentum in private equity investments, the emergence of new unicorns, and a promising uptick in public market activity towards the quarter-end are encouraging indicators.”
“The quarter witnessed steady activity in sectors like banking and infrastructure signaling continued investor confidence in India’s long-term growth story. Looking forward, we remain optimistic that easing external pressures and strong domestic fundamentals will drive deal activity in the coming months,” Vijetha added.
PE activity remained relatively resilient in Q2 2025, with 357 deals totalling $7.4 billion, representing the second-highest volume since Q4 2022. However, deal values declined quarter-on-quarter, reflecting the absence of high value investments seen in Q1.
M&A activity in Q2 2025 continued on a downward trajectory, with 197 deals amounting to $5.4 billion. The quarter featured just one billion-dollar deal — Sumitomo Mitsui Banking Corporation’s $1.57 billion investment in YES Bank, which alone contributed significantly to the total value. The banking sector emerged as the top contributor, accounting for nearly half the deal value through three high-value transactions. Notably, Zaggle Prepaid Ocean Services made headlines with a bold domestic acquisition spree across IT, banking, and media, reflecting a differentiated consolidation strategy amid overall softness, the report states.
Public market fundraising remained measured in Q2 2025, with IPO activity continuing its downward trend for the third straight quarter. However, despite the overall slowdown, June offered signs of recovery, recording the second-highest monthly IPO volumes and values in 2025.
On the QIP front, activity remained stable with 16 issuances totaling $2.2 billion, nearly mirroring the previous quarter. The banking sector was the dominant driver, accounting for 49 per cent of QIP proceeds, as six banks collectively raised $1.1 billion, highlighting sustained institutional investor interest in the financial sector, the report added.
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