India’s financial services sector saw a rebound in deal value in the third quarter of 2025 despite a slowdown in overall volumes, underscoring continued investor confidence in the country’s financial ecosystem. According to the Grant Thornton Bharat Q3 2025 Financial Services Dealtracker, the quarter recorded 61 deals worth USD 7.8 billion, marking a 23 per cent decline in deal volume but a 39 per cent rise in value, the highest since the first quarter of 2024.
This jump in value was powered by three billion-dollar transactions — including Sumitomo Mitsui Banking Corporation’s USD 1.3 billion stake purchase in Yes Bank, HDB Financial Services’ USD 1.5 billion IPO, and a Qualified Institutional Placement (QIP) by the State Bank of India (SBI). Together, these large-scale transactions reflected renewed institutional confidence in India’s financial sector despite global macroeconomic volatility.
“Q3 reflects the current dichotomy in India and global markets,” said Vishal Agarwal, Partner, Private Equity Group and Deals Tax Advisory Leader at Grant Thornton Bharat. “While overall deal volumes softened, long-term strategic investments, uptick in QIP and IPO activity and fintech innovation highlight sustained investor confidence. Domestic reforms such as GST rationalisation could boost consumption, and supportive measures for fintech will be key to driving growth.”
Mergers and Acquisitions: Smaller Deals, Strong Interest
The mergers and acquisitions (M&A) segment saw 17 deals worth USD 1.5 billion, a slight 6 per cent rise in volume but a 44 per cent drop in value from the previous quarter. The decline stemmed largely from the absence of major transactions. While the previous quarter featured three large deals totalling USD 2.4 billion, Q3 saw only two big-ticket transactions worth USD 1.3 billion, which accounted for 91 per cent of total M&A value.
The average deal size fell sharply from USD 162 million in Q2 to USD 86 million, signalling a more measured approach to acquisitions. Domestic transactions made up 76 per cent of deal volume, while inbound investments drove most of the value, reflecting continued cross-border interest even as investors grew selective.
Private equity (PE) and venture capital (VC) activity moderated during the quarter, with 38 deals worth USD 1.2 billion, representing a 33 per cent decline in volume and a 37 per cent fall in value compared to Q2 2025. Early-stage and Series A and B rounds dominated the funding landscape, focused largely on expansion across new geographies.
Only four deals exceeded USD 100 million, together contributing USD 729 million, while smaller investments under USD 50 million made up 83 per cent of transactions but only 29 per cent of total value. The largest deal of the quarter was Partners Group and Jungle Ventures’ USD 230 million investment in Infinity Fincorp Solutions Pvt Ltd.
Public market activity surged in the third quarter, offsetting the weakness in private transactions. Three IPOs raised USD 2 billion, while three QIPs brought in USD 3.1 billion. Although the number of QIPs halved from the previous quarter, their total value rose nearly 2.8 times, underscoring robust investor appetite for large-cap financial firms.
Grant Thornton Bharat noted that the quarter’s performance was “characterised by a few high-value issuances driving the market,” signalling continued structural strength and strategic opportunity within India’s financial landscape.
The fintech sector dominated deal activity with 26 transactions, accounting for 47 per cent of total deal volume and USD 409 million in value. However, both volumes and values fell 33 per cent and 38 per cent respectively from the previous quarter. Nearly all fintech deals were small-ticket, under USD 50 million, except for one USD 170 million investment that comprised 42 per cent of the sector’s value.
The banking and NBFC segment led in value terms, clocking USD 2 billion across 16 M&A and PE deals, or 77 per cent of total sectoral value, driven by one billion-dollar transaction and four deals above USD 100 million. The insurance and TPA space remained subdued, with flat deal volumes and a 14 per cent drop in value, as investors stayed cautious amid regulatory shifts.
The report concluded that while macroeconomic uncertainty continues to temper investor sentiment, India’s financial sector remains well-positioned, buoyed by long-term reforms, deepening capital markets, and steady digital transformation. |
