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In the second quarter of 2025, Indian corporations navigated a cautious mergers and acquisitions landscape, as global economic uncertainties cast a long shadow over dealmaking sentiment. The quarter saw a total of 582 transactions — including initial public offerings (IPOs) and qualified institutional placements (QIPs) — worth $17 billion. Excluding public market activity, the number stood at 554 deals valued at $12.8 billion, a report by Grant Thornton Bharat said.
While deal volumes rose 23 per cent year-on-year compared to Q2 2024, there was a 13 per cent decline in the number of deals and a steep 48 per cent drop in total deal value compared to Q1 2025. Analysts attribute this fall to global instability, including the Iran-Israel conflict, the ongoing Russia-Ukraine war, US policy uncertainty, and elevated gold prices — all of which contributed to investor caution, the report stated.
Despite the muted performance, experts believe India’s strong macroeconomic fundamentals and high-growth sectors will likely revive deal momentum in the second half of 2025.
Shanthi Vijetha, partner, growth at 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.”
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M&A activity hits new lows
Mergers and acquisitions (M&A) activity in Q2 2025 remained subdued, with only 197 deals worth $5.4 billion — making it the lowest quarterly M&A value since Q2 2023. This marked an 81 per cent decline in domestic deal values from the previous quarter, driven by the absence of multiple billion-dollar deals. The only major M&A this quarter was Sumitomo Mitsui Banking Corporation’s $1.57 billion investment in YES Bank.
Zaggle makes consolidation moves
Cross-border activity also slowed, with outbound M&A dropping 25 per cent in volume and 74 per cent in value. Inbound deals held steady, reflecting selective foreign interest. The banking sector led the charge, contributing nearly half the total M&A value through three key deals. Among standout performers, Zaggle Prepaid Ocean Services made aggressive acquisitions across IT, banking, and media sectors, signaling a bold consolidation strategy despite overall market softness.
Private equity shows stability
Private equity (PE) deals remained relatively stable with 357 transactions worth $7.4 billion — the second-highest quarterly volume since Q4 2022. However, deal values dipped due to fewer large-ticket investments compared to Q1. There were 18 deals valued above $100 million, totalling $4.6 billion, down from 21 such deals worth $6.1 billion in the previous quarter, the report said.
The largest PE deal was Warburg Pincus and Abu Dhabi Investment Authority’s $862 million investment in IDFC FIRST Bank.
Public market activity sees modest recovery
The IPO market remained slow for the third straight quarter, with 12 IPOs raising $1.9 billion — down 25 per cent in volume and 26 per cent in value from Q1 2025. However, June showed signs of revival with strong listings from Leela Hotels ($407 million), Ather Energy ($343 million), and Aegis Vopak Terminals ($326 million).
QIP activity held firm, with 16 issuances raising $2.2 billion, nearly matching the previous quarter’s tally. The banking sector dominated here too, with six banks raising $1.1 billion, indicating continued institutional interest.
Sectoral highlights of Q2CY25
Retail and consumer: Led in volume (21 per cent of deals) but saw a 78 per cent fall in value due to fewer big deals
Banking and financial services: Topped deal values at $4.5 billion across 73 deals, with six high-value transactions
Infrastructure: Second-highest in deal value ($1.2 billion), supported by large PE inflows into road and urban projects
IT & ITeS: Logged 58 deals but suffered a 35 per cent drop in volume and 57 per cent drop in value from Q1
Manufacturing: Reached its highest-ever deal volume, even as values declined 24 per cent quarter-on-quarter.
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