India’s consumer and retail sector recorded 120 deals worth USD 884M in Q2 2025, according to Grant Thornton Bharat. Despite a 26% rise in deal volume, values fell to their lowest since Q4 2022, with textiles and FMCG leading smaller, strategic investments.
M&A and PE Deal Snapshot (Source: prhandout)
According to the Grant Thornton Bharat, a member firm of Grant Thornton International Ltd (GTIL), UK Q2 2025 Consumer and Retail Dealtracker, India’s consumer and retail sector saw 120 transactions valued at USD 884 million, including IPO and QIP activity. While deal volumes remained relatively healthy—up 26% year-on-year—the quarter marked the lowest deal values since Q4 2022, reflecting a clear shift toward smaller-ticket transactions amid muted public market activity and the absence of high-value deals. This led to a steep drop in average deal size from USD 27.2 million to just USD 7.2 million. Textiles and FMCG emerged as standout sub-sectors, with investors prioritising value chain control, sustainability, and product-led growth in a cautious market environment.
Mergers and Acquisitions (M&A) landscape
M&A activity in India’s consumer and retail sector slowed down in Q2 2025, recording 24 deals valued at USD 209 million—a marginal 8% decline in volumes but a sharp 90% drop in values due to the absence of mega-deals like the USD 1.4 billion Wilmar–Adani Wilmar transaction in the previous quarter. This quarter saw a return to mid-market, strategic tuck-in acquisitions focused on category expansion, operational synergies, and premium adjacencies rather than scale-driven moves.
FMCG and textiles emerged as the key drivers, accounting for over half the volume and two-thirds of deal value, with ITC’s acquisitions across the FMCG and apparel segments totalling USD 64 million.
Private Equity (PE) landscape
Private equity activity in India’s consumer and retail sector eased in Q2 2025, with 94 deals valued at USD 640 million, marking a 17% drop in volumes and a steep 60% decline in values compared to the previous quarter.
This was the sector’s lowest quarterly PE value since Q3 2022, marking a shift toward smaller, value-driven transactions.
Value fashion led PE volumes (27%) and values (42%), while health-forward FMCG brands drew significant interest. The consumer services segment saw a sharp resurgence with deal volumes witnessing a 138% surge quarter-on-quarter, driven largely by early-stage rounds. Overall, investors focused on profitability, consumer stickiness, and efficient growth over scale-at-any-cost approaches.
Initial Public Offering (IPO) & Qualified Institution Placements (QIP) Landscape
Fundraising remained subdued in Q2 2025, with just USD 35 million raised through one IPO and one QIP, marking a sharp decline from USD 219 million in the previous quarter. The slowdown reflects continued caution in capital markets, with companies increasingly favouring private funding over public routes amid market volatility.
Naveen Malpani, Partner and Consumer Industry Leader, Grant Thornton Bharat, commented, “Q2 2025 marked a period of strategic reset for the consumer and retail sector, with capital gravitating toward segments that offer long-term value and operational strength. Textiles, apparel, and clean-label FMCG stood out as clear favourites, backed by investor confidence in scalable models aligned to evolving consumer preferences and global supply shifts. What we’re seeing is a more deliberate investment lens, which prioritises efficiency, category leadership, and value chain control over sheer scale. As macroeconomic uncertainties persist, investors are placing their bets on brands and platforms that can deliver resilience, differentiation, and steady consumer loyalty.”
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