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Q2 2025 sees sharp drop in M&A and IPO activity, But PE remains resilient
Excluding public market activity, deal volume stood at 554 transactions worth USD 12.8 billion, reflecting a 13% QoQ drop in volume, even as year-on-year volumes rose 23% compared to Q2 2024—a sign of underlying resilience.
'The second quarter of 2025 was marked by a cautious investment environment influenced by global uncertainties,' said Shanthi Vijetha, Partner – Growth at Grant Thornton Bharat. 'However, the emergence of new unicorns and a late-quarter recovery in public markets offer optimism going forward.'
The Mergers & Acquisitions (M&A) segment witnessed a steep fall, with just 197 deals worth USD 5.4 billion—the lowest quarterly M&A value since Q2 2023. The absence of billion-dollar domestic deals was a key reason, with total domestic deal value plummeting by 81% QoQ.
The only billion-dollar M&A this quarter was Sumitomo Mitsui Banking Corporation's USD 1.57 billion stake in YES Bank, which accounted for a large share of total deal value.
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.
Outbound deals dropped 25% in volume and 74% in value
Inbound deals, however, held steady, signaling selective confidence from foreign investors in Indian assets
One standout domestic player, Zaggle Prepaid Ocean Services, made a string of acquisitions across IT, banking, and media, bucking the cautious trend with a bold consolidation strategy.
Private Equity Holds Firm Despite Value Drop
Private Equity (PE) deals continued to demonstrate resilience, with 357 transactions totalling USD 7.4 billion—the second-highest quarterly volume since Q4 2022. However, values dipped due to fewer mega-deals compared to Q1.
18 PE deals were above USD 100 million, totalling USD 4.6 billion, down from 21 deals worth USD 6.1 billion last quarter
The largest PE deal was Warburg Pincus and ADIA's USD 862 million investment in IDFC FIRST Bank
Investor appetite remained strong in niche consumer and tech segments:
Mythik Entertainment raised USD 15 million, marking a notable play in media-tech
Citykart Retail secured USD 68 million in Series B funding, showing continued faith in value retail
Public Markets Cautiously Reopen
IPOs and QIPs remained subdued but stable:
12 IPOs raised USD 1.9 billion, down 25% in volume and 26% in value QoQ
June offered hope, with listings from Leela Hotels (USD 407M), Ather Energy (USD 343M), and Aegis Vopak Terminals (USD 326M) pushing monthly totals to their second-highest in 2025
Qualified Institutional Placements (QIPs) held ground, with 16 issuances worth USD 2.2 billion, led by the banking sector which raised USD 1.1 billion across six deals
Sectoral Trends: Banking Shines, Retail and IT Slide
Retail & Consumer led in volume (21% of total activity) but deal values fell 78%
Banking and Financial Services dominated in value—USD 4.5 billion across 73 deals, the highest since Q3 2022
Infrastructure followed, with USD 1.2 billion from 10 deals, driven by large PE bets in roads and urban development
IT & ITeS posted 58 deals, but saw a 35% drop in volume and 57% dip in value
Manufacturing hit a record high in deal volume, aided by policy support, even as values dipped 24%
Despite the Q2 slump, analysts remain cautiously optimistic for the second half of 2025, as geopolitical pressures (Iran-Israel, Russia-Ukraine, US policy uncertainty) are expected to ease and India's macroeconomic fundamentals continue to attract long-term capital.
'Strong domestic consumption, policy momentum, and digital transformation are long-term positives. Once global volatility abates, we expect a solid rebound in deal activity,' Vijetha added.
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