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Key Points

India's deal activity saw a significant slowdown in Q2 2025 with both volume and value declining. Private equity investments dropped 26% while M&A transactions fell 27% quarter-on-quarter. The financial services sector recorded the highest deal value despite fewer transactions. Experts attribute the decline to increased caution and tighter investment decisions in the market.

Key Points: India Deal Activity Drops 20% in Q2 2025 as PE Investments Fall 26%

  • Deal volume fell 20% to 697 transactions in Q2 2025
  • M&A deals dropped sharply by 27% to 300 transactions
  • PE investments declined 26% in value to $10.9 billion
  • Financial services led in deal value at $4.1 billion despite fewer transactions
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India's investment activity declined in Q2 CY, pvt equity investment down by 26% in value: PwC Report

PwC report reveals sharp decline in India's deal activity with PE investments dropping 26% and M&A transactions falling 27% in Q2 2025.

"PE investments faced a notable decline, with deal values falling to USD 10.9 billion from USD 14.8 billion in Q1 CY25 – PwC Report"

New Delhi, July 28

India witnessed a slowdown in deal investment activity in the second quarter of calendar year 2025, with both volume and value showing a decline, according to a recent report by PwC India.

The report highlighted that after reaching a high of 867 deals in the first quarter, deal activity fell by 20 per cent to 697 deals in Q2 2025. In terms of value, deals dropped by 22 per cent, from USD 33.5 billion in Q1 to USD 26.2 billion in Q2.

It stated "After the high of 867 deals in the previous quarter, deal activity fell by 20 per cent to 697 volume wise and 22 per cent value wise".

Mergers and acquisitions (M&A) took a major hit during the quarter. The number of M&A transactions dropped to 300 from 413 in the previous quarter, showing a sharp 27 per cent decline.

This marks the largest quarterly drop in the last six quarters, ending the positive growth trend that had begun in Q1 2024.

Private equity (PE) investment deals also declined to 397 in Q2 2025, a 13 per cent decrease from 454 deals in the previous quarter.

In terms of value of deals, both M&A and PE showed declining trends quarter-on-quarter. M&A transactions reached USD 15.2 billion, down by 18 per cent from USD 18.6 billion in Q1 2025.

On the other hand, the private equity investments also saw a noticeable decline.

The report stated "PE investments faced a notable decline, with deal values falling to USD 10.9 billion from USD 14.8 billion in Q1 CY25. This is a 26 per cent decrease from the previous quarter".

It also showed a 6 per cent drop compared to USD 11.6 billion in Q2 2024, indicating more caution in the PE space.

Among sectors, the retail and consumer segment continued to lead in terms of volume with 116 deals. However, the total deal value in the sector was USD 1.4 billion, pointing to smaller ticket sizes.

The financial services sector recorded only 47 deals but had the highest deal value at USD 4.1 billion, thanks to larger transactions.

The technology sector followed with 99 deals worth USD 1.5 billion, while the pharmaceutical sector, despite having just 30 deals, posted a high deal value of about USD 4 billion.

Overall, while M&A activity shows some year-over-year strength, the private equity space seems to be facing a period of tighter investment decisions and increased risk review.

- ANI

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Reader Comments

P
Priya S
The pharma sector showing strong value despite fewer deals is interesting. Shows quality over quantity! Maybe investors are focusing on stable sectors during uncertain times.
A
Arjun K
‍♂️ Not good news for startups. PE funding down by 26% means many new businesses will struggle to raise capital. Government should intervene with more supportive policies.
S
Sarah B
As someone working in financial services, I can confirm the due diligence process has become much stricter. Investors are being extra careful after some high-profile failures last year.
K
Karthik V
The report could have analyzed regional distribution better. Most investments still concentrated in metro cities while tier 2/3 cities with great potential are being ignored.
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Nisha Z
Retail sector leading in volume but with small ticket sizes shows our consumption story is strong but needs bigger investments. FDI in retail could help boost this further!
M
Michael C
This might be a temporary correction rather than a trend. India's fundamentals remain strong compared to other emerging markets. Smart investors will see this as a buying opportunity.

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