MUMBAI: Deal activity in the domestic consumer and retail markets rose to a three-year high in the first quarter of calendar year 2025, as investors backed brands that merged tradition with innovation, Grant Thornton Bharat’s latest quarterly deal tracker report showed. The deals include mergers and acquisitions (M&As) and private equity (PE) transactions.
Topping the deal charts in the March quarter were two billion-dollar deals: PE player Temasek’s $1-billion investment in Haldiram Snack Foods for a 10% stake in the company and Wilmar International’s $1.4-billion investment to increase its shareholding (from 44% to nearly 75%) in Adani Wilmar (now called AWL Agri Business after Adani Group’s exit) on the M&A side. The mega deals signal growing investor confidence in India’s food processing sector.
“India’s consumer and retail sector is entering a dynamic phase of growth, with M&A and private equity investments surging across high-potential segments such as food & beverages, personal care, and e-commerce. In particular, the F&B space is seeing strong momentum, as consumers seek better products and brands embrace digital distribution to reach them,” Naveen Malpani, partner and consumer industry leader, Grant Thornton Bharat, said.
Both in terms of deal value and volume, the January-March quarter saw a steep rise versus the same periods in 2023 and 2024, touching nearly $4 billion in value and 139 deals in terms of number. This is three times the value of deals struck in the first quarter of 2023 ($1.28 billion) and twice the value of deals struck in the first quarter of 2024 ($1.74 billion). The number of deals in the first quarters of the last two calendar years stood at 78 and 102 each.
While the deal value and volume in the March quarter of 2025 is still lower than the first quarter of 2022, when a post-pandemic resurgence led to record $4.28-billion deals struck in terms of value across 171 transactions, experts say the pick-up in the first quarter of 2025 is still good for the sector after a challenging 2023 and 2024 for the consumer and retail sectors due to inflation and urban slowdown concerns.
“There is investor appetite in the market, but valuation concerns remain as the differential between the bid and the ask prices are high,” Nitin Gupta, partner, investment banking advisory, EY India, said.
Gupta cites food & beverages, healthcare, beauty and personal care among areas where investor interest remains high. However, the ongoing trade war between the US and China and the uncertainty thereof may also slow down deal activity for now, he said.
Some experts say that rising urbanisation and premiumisation trends and growing digital reach across tier 2 and 3 markets is reshaping the consumer landscape, forcing investors to take note.
“We expect strategic consolidation and capital inflows to continue within the consumer and retail sectors as businesses demonstrate resilience, digital agility and strong consumer connect,” Malpani says.
For instance, in the March quarter, the growing consolidation within the consumer sector was visible with top players such as Hindustan Unilever (HUL) acquiring D2C brand Minimalist, ITC picking up frozen foods’ player Prasuma, and Adani Wilmar buying GD Foods, maker of the Tops brand of sauces and pickles. Kandhari Global Beverages, a Coca-Cola India franchise bottler, on the other hand, increased its market presence with the acquisition of a bottling plant in north Gujarat.
Source: The Financial Express
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