Navigating the M&A landscape of India: Insights of H1 2025

As the global economy continues to navigate shifting geopolitical dynamics and evolving international trade policies, the overall Mergers and Acquisitions (M&A) landscape has exhibited remarkable resilience. Despite facing various challenges, including economic uncertainties and regulatory changes, M&A activity in India remained robust across multiple sectors. In a significant milestone, India is poised to become the fourth-largest economy in the world, as per IMF projections. The economic ascent not only underscores India's growing influence on the global stage but also reflects a thriving M&A environment for domestic and international investors exploring emerging markets.

The overall deal volume fell by 12% year-on-year, totaling 1,285 transactions. June stood out as the strongest month, with a deal value of US$8.4 billion, an impressive increase of 104% from May. However, the number of deals in June was only 136, marking the lowest monthly total in H1 and a significant 46% decrease from June 2024. While investment capital is still flowing, it is increasingly concentrated on a limited number of opportunities, reflecting a more cautious investor sentiment.

Big-ticket deals on the rise

A significant trend is the rise in large-value transactions. The first half of 2025 recorded 10 deals valued at over a billion dollars. Domestic M&A activity remains robust, accounting for 86% of total M&A deal volume. Meanwhile, Private Equity (PE) firms continue to hold significant dry powder, positioning themselves to capitalize on emerging investment opportunities. While Private Equity (PE) deal volume remained relatively stable, the market witnessed a notable uptick in large-value PE transactions, adding further momentum to overall deal activity.

Investment momentum builds in Power and Consumer Products and Retail sectors

The Power sector has emerged as a frontrunner in M&A activity in H1, leading the way with a deal value of US$8.5 billion. The renewable energy sector in India alone contributed around 80% of the Power sector’s total, marking a significant increase from US$3.2 billion in H1 2024 and US$2.8 billion in H2 2024, indicating a strong interest in sustainable investments. Strategic transactions dominated the Power sector, accounting for approximately US$6.5 billion out of the total US$8.5 billion deal value - nearly 85% of the sector’s activity. The strong preference for strategic deals underscores the industry's focus on long-term integration, consolidation of core operations, and alignment with broader energy transition goals.

India is now recognized as the world’s fourth-largest renewable energy market, having attracted over US$4 billion in FDI in the past year alone. Installed capacity of 220 GW, which is 45% of the country’s total energy mix, the sector has matured into an investor-friendly environment. The presence of over 60 marquee global investors, a strong track record of profitable exits, and a progressive policy framework are accelerating the shift towards the next level of growth in renewable energy.

Conclusion

The first half of 2025 illustrated stability in the M&A landscape in India despite macroeconomic headwinds and policy uncertainty. However, the recent announcement of fresh tariffs on Indian exports, in effect since early August, has reintroduced uncertainty into the trade environment. Despite these developments, India remains committed to a comprehensive and balanced trade agreements, with a strong focus on protecting key sectors such as MSMEs, agriculture, and services. The industry awaits clarity on tariff structures, regulatory frameworks, and market access which will decide the fate of transactions especially in businesses which have US exposure.