Private equity investors in India are increasingly favouring buyouts as they seek greater control and operational influence, driving a sharp rise in both deal value and volume. According to a recent EY report, average annual buyout investments rose 52% to $14.2 billion during 2021–2025, compared with $9.3 billion in 2016–2020. The average number of transactions also increased 30% to 56 deals from 43 over the same period.
The shift reflects a maturing market where a growing pool of cash-generative businesses is becoming available for full or majority stake sales. EY said that founders, families and early investors are increasingly open to meaningful exits, often linked to succession planning, portfolio restructuring or professionalisation. This is creating a pipeline of assets where promoters are willing to cede control.
“Private equity investors are also increasingly prioritising control as returns from minority growth investing have become harder to deliver in a high-valuation environment,” Vivek Soni, partner and national leader, private equity services, EY India, told Fe. He added that buyouts offer scope for deeper operational value creation and tighter governance.
Global capital dynamics are also contributing to the trend. Large international funds, with record levels of dry powder, are deploying capital through control transactions. “They are bringing not just capital but battle-tested operational playbooks: 100-day plans, Ebitda engineering, and exit discipline that transforms good businesses into institutional-grade assets,” Sunil Thakur, partner and investment committee member at Quadria Capital, said.
Operational Playbooks
Improving exit visibility is another factor supporting buyout growth. “Sponsor-to-sponsor deals, strong strategic interest and a resilient IPO market have made buyouts more predictable from an exit standpoint,” Soni said.
Despite the rise, India’s buyout model differs from developed markets where leverage plays a central role. “Unlike the western PE buyout playbook, the India strategy isn’t underpinned by debt within a perfectly oiled leveraged buyout (LBO) machine. Deals are largely equity funded and returns here have to be earned the hard way — through governance reform, operational improvement, systematised growth, and less from financial engineering,” Nruthya Madappa, partner at 3one4 Capital, said.
She added that the continued acceleration of buyouts despite lower leverage highlights both asset quality and a shift in how global investors view India. “That supply of high-quality, under-managed assets, combined with a maturing IPO market providing credible exit pathways, is what’s drawing the world’s best capital allocators,” Madappa said.
Maturing Market
Over 2016–2025, buyouts accounted for 25% of total PE/VC investments by value and 5% by volume, making them the third-largest strategy after growth investments ($136.5 billion) and startup investments ($121.9 billion), according to EY.
Industry participants expect the momentum to continue. “Over the long term, as India’s startup and mid-market ecosystem continues to mature, buyouts will become a more mainstream investment strategy, with stronger exit visibility and more predictable return profiles,” said Vikram Gupta, founder and managing partner at IvyCap Ventures.
While global buyout activity has softened in recent quarters, the impact on India is expected to be limited. “In such an environment, investors often prefer control-oriented strategies like buyouts, which provide greater visibility and the ability to drive operational improvements,” Gupta said.