A Bain report says 91 Indian companies raised USD19.25 billion through IPOs, a three-fold increase compared to 2023. Marquee listings, such as Kedaara’s Vishal Mega Mart (USD1.7 billion) and Hexaware Technologies (USD1 billion), demonstrated investor appetite for public market exits. After mid-2024, the IPO boom began to wane as listings fell from 29 in Q3 of 2024 to just nine in the last quarter. Investors are now more risk-averse because of various macroeconomic and geopolitical factors, including tariff impositions and declining capital market valuations.

As public-market windows tighten, PE funds increasingly turn to secondary and strategic exits. In 2024, secondary sales reached USD5.88 billion, an 11% increase from 2023. High-profile deals included Advent International’s exits from Bharat Serums & Vaccines and Manjushree Technopack. Exits through strategic sales remained a good option, with exits worth USD4.08 billion during 2024 according to the IVCA. The standout deal was Advent International’s total exit from Bharat Serums & Vaccines through a USD1.63 billion sale to Mankind Pharma Bharat. Next was the USD462.45 million exit of General Atlantic and Invus Group from Capital Foods by selling to Tata Consumer Products.

Carve-outs may become a more prominent feature of India’s PE exit landscape, particularly when traditional routes are less viable. In 2024, carve-outs accounted for 20% of all PE buyouts in the Asia-Pacific region. They are very effective when regulatory hurdles or the need to separate capital-intensive units from parent companies make outright sales or IPOs difficult. A prime example is 2023’s joint acquisition of 90% of HDFC Credila by BPEA EQT and ChrysCapital for USD1.1 billion, driven by regulatory imperatives. In 2024, Brookfield Asset Management acquired American Tower Corporation’s entire Indian tower portfolio business for USD2.5 billion, enabling ATC India to spin off regulated and capital-intensive units from their parent companies.

Globally, SPACs have been touted as an alternative exit route. However, they have only a limited role in India. No major SPAC deals were registered in 2024 because regulations prevent direct mergers between US SPACs and Indian companies unless targets redomicile abroad. The Securities and Exchange Board of India has introduced draft rules to allow SPACs in GIFT City with approval. One notable SPAC exit is Hiranandani Group’s Yotta merging with Nasdaq-listed Cartica Acquisition Corporation in a USD2.75 billion “flip-out” listing. The Reserve Bank of India (RBI) and tax authorities view such cross-border SPAC deals as outbound investments requiring approval. The RBI has proposed relaxing the restrictions of the Foreign Exchange Management (Overseas Investment) Regulations, 2022, for genuine non-tax-driven listings. This will smooth the path for SPACs.

EY and the IVCA said 39 PE exit transactions in the first half of 2025 were valued at USD8 billion, 57% higher than in the first quarter of 2024. Financial services, consumer and retail and healthcare lead the way. Public market sales dominate financial services, with an even split between secondary and public market exits in healthcare. As funds look to offload ageing assets, the speed of exit transactions is expected to accelerate, with IPOs and secondary sales remaining the preferred strategies for the near future.

This article was originally published in India Business Law Journal on 12 June 2025 Co-written by: Taranjeet Singh, Partner; Niyati Karia, Associate; Mihira Jaggi, Associate. Click here for original article

Read Less-