By Puneet Gupta & Siddharth S Singh, Respectively adjunct professor (IMT Ghaziabad) and managing partner, Kentrus Investment Advisors, and associate professor, marketing, ISB, Hyderabad & Mohali
Private equity (PE) in India is undergoing a transformation more profound than a cyclical investment shift. It is entering a new structural phase. Long seen as a promising but complex growth market, India is now emerging as Asia’s most dynamic buyout destination. Though those numbers are compelling, this transformation is not just about the volume of capital being deployed. It is about the changing character of the capital, the sophistication of the strategies, and the growing alignment between global investor expectations and local business realities.
In 2024, India outperformed every other country in Asia in both PE deal value and volume, according to Bain & Company. With PE and venture investments expected to cross $50 billion annually in the near term, India now rivals China and Japan not just in size but also in strategic centrality for global funds. The country has graduated from being an “emerging allocation” to becoming a core geography in Asia’s private capital architecture.But the headline metrics only tell part of the story. The deeper change lies in how PE is being practised. What was once a market dominated by minority growth investments — passive, promoter-dependent, and liquidity-constrained — is being replaced by a more active, institutional, and control-driven model.
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A growing share of deals in India today involves majority or full buyouts, allowing investors not just to participate in growth but also shape it. This evolution is as much cultural as it is financial, and its effects are reverberating across boardrooms, management teams, and capital markets.The catalyst for this shift is a generational realignment in Indian business families. Many first-generation entrepreneurs, having built formidable businesses from scratch, are now seeking succession pathways that do not involve handing over to the next generation.
Others have heirs who are globally educated and strategically inclined but not interested in operational leadership. These successors are often open to sharing ownership and decision-making with institutional investors. For them, PE is not a threat — it is a partner in transition. As a result, what was once a rigid barrier to control deals is now a window of opportunity.Control investments also enable a fundamental shift in talent dynamics. Historically, many professionals were wary of joining promoter-driven firms, perceiving them as lacking transparency, professional autonomy, or a clear growth trajectory. A buyout by a reputable PE fund changes that calculus.
The institutional credibility and long-term capital brought in by PE firms make it easier to attract experienced leadership from global corporations or high-growth start-ups. More importantly, these professionals are often granted equity-linked incentives, such as employee stock ownership plans, that provide genuine economic participation, creating powerful alignment between capital and capability.Beyond boardroom optics, this infusion of talent translates directly into execution capacity. PE in India is no longer about capital stewardship alone — it is about building capability. Increasingly, funds are assembling operating teams with expertise in functional domains such as finance, digital transformation, environmental, social, and governance, and mergers and acquisitions. These professionals are deployed across portfolios to drive operational efficiency, unlock inorganic growth, and establish performance monitoring systems that most mid-market firms lacked historically.
In sectors like healthcare, consumer, and industrial manufacturing, where operational leverage determines enterprise value, these capabilities have become differentiators. Another signal of India’s maturity is the emergence of a viable secondary market for PE assets. Where exits were once a persistent bottleneck and relied heavily on initial public offerings (IPOs) or promoter buybacks, today’s environment supports more diverse liquidity pathways. Improved governance, better reporting standards, and a more sophisticated general partner (GP) ecosystem has made PE-backed businesses more “exit-ready”. Sponsor-to-sponsor deals, where one fund sells a portfolio company to another with a different investment horizon or specialisation, are becoming common.
Continuation vehicles and structured secondary funds are also gaining ground, allowing GPs to extend ownership in high-performing assets while providing liquidity to original limited partners.This growing liquidity infrastructure has profound implications. First, it reduces pressure on forced exits, allowing value realisation over longer holding periods. Second, it introduces greater flexibility into fund management, enabling GPs to recycle capital and LPs to fine-tune risk exposure. Finally, it reinforces the credibility of India as a full-cycle investment market — where entry, transformation, and exit can all occur within a coherent institutional framework.
Control deals further amplify this flexibility. Unlike minority positions, where the timing and terms of an exit often hinge on promoter preferences, control stakes allow PE funds to shape exit strategies more proactively. Whether through IPOs, secondary sales, or strategic acquisitions, funds can calibrate the timing, scale, and nature of the liquidity event to suit market conditions. This, in turn, helps scale fund sizes in a more sustainable manner — deepening capital deployment without diluting investment discipline.
Taken together, these developments signal a broader shift: India’s PE ecosystem is moving from a capital-first to a capability-first model. In the past, access to growth opportunities was enough. Today, value creation depends on governance, talent, execution, and exit strategy. The flywheel is self-reinforcing: Stronger governance attracts stronger talent; stronger talent drives better outcomes; better outcomes attract larger capital pools; and larger capital pools enable deeper transformations.
This evolution does not reject the core promise of Indian PE — it refines it. Growth capital remains a central thesis, but the instruments, partnerships, and strategies used to deliver that growth are becoming more institutional, more operational, and more enduring. India is no longer simply a growth market — it is a value creation market.
For investors, founders, and policymakers, this shift has strategic significance. It signals that India is not merely catching up with global norms — it is beginning to shape them in its own way. The rise of buyouts, the normalisation of secondaries, the professionalisation of management, and the institutionalisation of exits all point towards a market that is capable of absorbing and justifying long-hold, high-conviction capital.PE 2.0 in India is not a trend, it is a structural realignment. For global GPs looking to deepen their Asian footprint and for Indian entrepreneurs seeking transformative capital, the time for partnership is not in the future. It is now.