Easing Global Headwinds to Drive Deal Surge for India Inc.: Report

Even though they had to contend with a subdued deal-making environment in the second quarter of 2025, thanks to persisting international uncertainties, India Inc. is starting to show signs of strength—particularly by way of rising foreign investor involvement in inbound M&A and a reassuring bounce-back in public markets, a report issued Wednesday by Grant Thornton said.

The report points out that, as international geopolitical tensions begin to subside, transaction pace is set to pick up towards the latter part of 2025. Such a possible revival is anticipated to be backed by India's sound macroeconomic conditions and investors' demand for burgeoning sectors.

582 deals, in the form of IPOs and Qualified Institutional Placements (QIPs) worth $17 billion, were registered during Q2 2025, along with 554 deals worth $12.8 billion. This is a 13% decline in deal volume from the earlier quarter owing primarily to continued global turmoil in the form of Iran-Israel tensions, persistent uncertainty in U.S. policies, the ongoing Russia-Ukraine war, and elevated gold prices—all leading to heightened investor wariness.

Shanthi Vijetha, Grant Thornton Bharat Partner – Growth, said about the cautious sentiment: "The second quarter of 2025 was characterized by a cautious investment climate driven by global uncertainties. While there was the slowdown, the continued pace of private equity investments, the creation of new unicorns, and a healthy pick-up in public market activity towards the end of the quarter are reassuring signs."

She added, "The quarter saw consistent activity in segments such as banking and infrastructure indicating sustained investor optimism in India's long-term growth narrative. In the months ahead, we continue to believe that alleviating external pressures and robust domestic fundamentals will propel deal activity."

Private equity (PE) deals remained sturdy, with 357 deals totaling $7.4 billion—the second-highest since Q4 2022. PE deal value decreased overall from the last quarter because of the lack of big-ticket investments as in Q1.

Meanwhile, M&A activity continued its declining trend. The second quarter featured 197 mergers and acquisitions worth $5.4 billion. Interestingly, the sole billion-dollar deal reported was Sumitomo Mitsui Banking Corporation's $1.57 billion stake in YES Bank that accounted for a significant portion of M&A value for the quarter. Banks led the pack, accounting for almost half the aggregate deal value through three large deals. One highlight of the year was Zaggle Prepaid Ocean Services, which embarked on a bold domestic acquisition push in IT, banking, and media—highlighting an intended strategic consolidation push amid broader deal-making weakening.

Public equity fundraising remained weak, and IPO activity sustained its third quarter in decline. However, relief came in June with the second-highest volume and value of monthly IPO activity in 2025, which could indicate a rebound.

On the QIP side, activity continued fairly in line with the previous quarter. Sixteen QIP issues collected $2.2 billion, led for the second consecutive quarter by the banking sector. Banks raised a combined $1.1 billion—approximately 49% of the aggregate QIP size—reflecting continued institutional investor interest in the banking sector.