India's auto sector sees $1.5 billion in deals in Q1 2025 despite IPO lull

India’s automotive and mobility sector kicked off 2025 on a strong note, racking up 29 deals worth $1.5 billion in the January–March quarter, according to the latest report by Grant Thornton Bharat. Despite a 63 per cent drop in overall deal value from the previous quarter—attributable to the absence of Hyundai Motor India’s $3.6 billion initial public offering (IPO)—the underlying investment momentum remained robust.

 

Excluding IPOs and Qualified Institutional Placements (QIPs), deal volumes rose 27 per cent from 22 in Q4 2024 to 28 in Q1 2025, while values surged 191 per cent from $509 million to $1.4 billion. The growth was underpinned by a mix of strategic acquisitions and financial investments, including one marquee billion-dollar private equity deal and three high-value transactions exceeding $50 million.

 

“India’s automotive and mobility sector is undergoing transformation, driven by electrification, digital integration and a rising focus on sustainability,” said Saket Mehra, partner and auto industry leader at Grant Thornton Bharat. “Despite global trade uncertainties and supply chain challenges, investor confidence remains high. To stay competitive, Indian players must double down on innovation, partnerships and next-gen mobility offerings.”

 

Mergers and acquisitions (M&A) continued to gain momentum, recording nine deals worth $359 million—marking the third straight quarter of growth. The M&A landscape was dominated by domestic consolidation aimed at strengthening localisation and realigning product portfolios.

 

The highlight was Minda Corporation’s acquisition of a 49 per cent stake in Flash Electronics India for $161 million. Italy-based Fontana Gruppo’s $115 million acquisition of a 60 per cent stake in Right Tight Fasteners marked a rare but notable inbound move, while outbound activity remained subdued. The average deal size jumped from $5 million in the previous quarter to $31 million, with the top three deals contributing nearly 94 per cent of total M&A value.

 

Most M&A activity targeted the electric vehicle (EV) ecosystem, including battery management and energy storage solutions, as well as consolidation in the commercial EV segment.

 

Private equity and venture capital (PE/VC) investments also posted a robust quarter, clocking 19 deals worth $1.12 billion—a six-fold jump in value and a 36 per cent increase in volume compared to Q4 2024. The spike was largely driven by a $1 billion investment in Erisha E Mobility Pvt Ltd by a UAE-based investor.

 

While this single deal skewed the average ticket size to $59 million, nearly 80 per cent of the deals were under $10 million, indicating sustained investor interest in early- and growth-stage ventures across the auto and mobility landscape.

 

Public market activity took a breather after Hyundai Motor India’s blockbuster listing last quarter. No IPOs were recorded in Q1 2025, and the sole QIP came from PMI Electro, which raised $29 million to support expansion and technological upgrades.

 

Though subdued, the capital markets’ interest in innovation-driven companies remains intact, the report noted, pointing to the sector’s continued evolution and long-term promise.