India’s Consumer and Retail Sector Marks a Strong Start to 2025 volumes surge to 3-yr high: Grant Thornton

India’s consumer and retail sector achieved its highest deal activity in three years during Q1 2025, with 139 deals worth $3.8 billion—a 65% rise in volume and 29% in value, according to a Grant Thornton Bharat report. Key deals included Temasek's $1 billion stake in Haldiram’s and Wilmar International's $1.44 billion Adani Wilmar buyout. Consumer and retail led private equity activity, while e-commerce and FMCG drove 63% of volumes. Despite growth, muted valuations and global uncertainties challenge investor confidence.

India’s consumer and retail industry began 2025 on a high note, achieving its best performance in deal activity in three years. According to a report by Grant Thornton Bharat, the first quarter saw a significant uptick in private equity (PE) and mergers and acquisitions (M&A) activity, highlighting the sector’s resilience and potential for growth.

In total, the consumer and retail sector closed 139 transactions worth $3.8 billion, representing a 65% increase in deal volume and a 29% rise in deal value compared to the previous quarter. These figures established the sector as the most active by transaction volume, fueled by a surge in smaller deals as well as two major billion-dollar agreements.

Milestone Transactions Set the Tone for 2025

Two landmark deals dominated the quarter, accounting for over 75% of the sector’s total deal value. Temasek, a Singapore-based investment company, made a $1 billion acquisition of a 10% stake in Haldiram’s, marking the largest-ever packaged food transaction in India’s history. In a parallel development, Wilmar International, also headquartered in Singapore, completed a $1.44 billion buyout of the staples business of Adani Wilmar. These high-value transactions highlighted the growing appeal of India’s consumer and retail market to global investors.

Broader Trends in Private Equity and Venture Capital

Consumer and retail’s dominance extended beyond individual transactions. Shanthi Vijetha, partner in due diligence at Grant Thornton Bharat, noted that the sector accounted for 28% of all deal volumes and 18% of deal values in private equity activity during the quarter. The report further revealed that overall PE and venture capital (VC) dealmaking in India reached an 11-quarter high, with 408 deals totaling $8.6 billion – a 66% increase in value compared to the previous quarter.

Within the consumer and retail sector, segments such as e-commerce, fast-moving consumer goods (FMCG), textiles, apparel, accessories, and personal care collectively contributed 63% of the deal volume. Despite the high transaction count, the average deal size declined from $34.8 million in the last quarter to $27.2 million, reflecting a larger number of small-ticket investments.

Market Challenges and Global Factors

While the numbers underline a robust recovery, the report also pointed to challenges in the broader capital markets. Vishal Agarwal, partner and private equity group and deals tax advisory leader at Grant Thornton Bharat, observed that Indian markets are still grappling with muted investor sentiment. “Valuations may need to align with more realistic levels to reignite investor confidence,” he explained. Agarwal further emphasized that global uncertainties, particularly regarding U.S. tariff policies, are likely to keep investors cautious in the short term.

The first quarter of 2025 has set a strong precedent for India’s consumer and retail sector, underscoring its importance in the country’s broader private equity and M&A landscape. With significant billion-dollar deals and robust activity across multiple subsectors, the industry demonstrates both resilience and growth potential. However, as valuations adjust and global uncertainties linger, stakeholders will need to navigate carefully to sustain this momentum.

Source: Data and insights derived from the Grant Thornton Bharat report, as referenced in a published newspaper article.