Key Points

The fintech sector stood out in terms of deal activity, attracting private equity interest in AI, digital payments, and automation, highlighting the sector's resilience amid global uncertainty, the report from Grant Thornton Bharat said.

The total deal value in Q3 2025 also marked the highest quarterly value since Q1 2024, the report said.

"Q3 reflects the current dichotomy in India and global markets. While overall deal volumes softened, long-term strategic investments, an uptick in QIP and IPO activity and fintech innovation highlight sustained investor confidence," said Vishal Agarwal, Partner, Private Equity Group and Deals Tax Advisory Leader, Grant Thornton Bharat.

Domestic reforms, such as GST rationalisation, could boost consumption, and rethinking acquisition financing by banks and supportive measures for fintech will be key to driving the sector's growth trajectory, Agarwal said.

Further, Q3 2025 recorded 17 M&A deals worth $1.5 billion, marking a slight 6 per cent increase in deal volumes, the report noted.

M&A deal values, however, reflected a more measured environment, characterised by smaller average deal sizes. Domestic transactions led in volume, contributing 76 per cent of deals, while inbound investments drove overall value, highlighting continued cross-border interest despite a quieter quarter for large-scale M&A.

Early-stage, Series A and B investments dominated the private equity (PE) funding landscape, primarily to support geographic expansion. Dominated sector deal value with $2 billion across 16 M&A and PE deals (77 per cent of total value). High-value transactions drove the quarter, with one billion-dollar deal and four deals over $100 million contributing 91 per cent of sector value.

Further, the quarter also witnessed a strong rebound in public market activity, with two billion-dollar deals (QIP and IPO) together contributing 57 per cent of total sector value, offsetting declines in private transactions, said the report.

- IANS