In the first quarter of 2025, the domestic consumer and retail sector experienced a surge in deal activity, reaching its highest level in three years. According to Grant Thornton Bharat’s latest quarterly deal tracker, investors are increasingly drawn to brands that successfully blend traditional values with modern innovation. This uptick includes significant mergers and acquisitions (M&As) as well as private equity (PE) transactions, showcasing a vibrant market landscape.
Major Deals Highlight Investor Confidence
The standout transactions in the March 2025 quarter featured two substantial deals. First, Temasek made headlines with a $1 billion investment in Haldiram Snack Foods, acquiring a 10% stake in the well-known brand. Additionally, Wilmar International invested $1.4 billion to enhance its share in Adani Wilmar (now renamed AWL Agri Business) from 44% to nearly 75%. These significant moves reflect a growing confidence among investors in India’s thriving food processing sector.
Growth in Consumer and Retail Sector
“India’s consumer and retail landscape is entering an exciting growth phase, with M&A and private equity investments significantly rising across promising areas like food & beverages, personal care, and e-commerce. The food and beverage sector, in particular, is gaining traction, driven by consumer demand for quality and brands leveraging digital platforms for wider reach,” explains Naveen Malpani, partner and consumer industry leader at Grant Thornton Bharat.
The January-March 2025 quarter recorded remarkable growth in both deal value and volume, reaching nearly $4 billion across 139 transactions. This represents a threefold increase from the $1.28 billion in deals during the same period in 2023 and doubles the $1.74 billion recorded in 2024. In comparison, the first quarters of the previous two years saw 78 and 102 deals respectively.
Challenges and Market Dynamics
While this surge signals a positive shift, it remains below the impressive $4.28 billion recorded in the first quarter of 2022, following the pandemic’s peak. Experts recognize that the recent uptick is a welcome development after a challenging 2023 and 2024, marked by inflationary pressures and urban market slowdowns.
“There is a noticeable appetite from investors; however, concerns regarding valuations persist, particularly due to the significant gap between bid and asking prices,” notes Nitin Gupta, partner at EY India. He identifies key sectors with sustained investor interest, including food & beverages, healthcare, and personal care. Nevertheless, ongoing global trade tensions, particularly between the U.S. and China, could potentially dampen deal activity in the near term.
Emerging Trends Reshaping the Market
Experts suggest that increasing urbanization, premiumization trends, and enhanced digital access in tier 2 and 3 markets are transforming the consumer landscape, compelling investors to adapt.
“We anticipate ongoing strategic consolidation and capital influx within the consumer and retail sectors as businesses showcase resilience, digital adaptability, and a strong connection with consumers,” Malpani adds.
Noteworthy Acquisitions in the Sector
The consolidation trend was evident in the latest quarter, with major players making strategic acquisitions. For instance:
- Hindustan Unilever (HUL) acquired the D2C brand Minimalist.
- ITC expanded its portfolio by purchasing frozen food brand Prasuma.
- Adani Wilmar acquired GD Foods, the maker of the well-known Tops sauces and pickles.
Additionally, Kandhari Global Beverages, a Coca-Cola India franchise bottler, bolstered its market presence by acquiring a bottling facility in north Gujarat.
This vibrant activity in the consumer and retail sectors highlights a robust market poised for further growth and innovation in the coming years.
