India’s financial services sector witnessed a steady uptick in deal activity during the second quarter of 2025, led by a surge in private equity (PE) investments and a few high-value mergers and acquisitions (M&As), according to Grant Thornton Bharat’s latest Financial Services Dealtracker report.
A total of 79 deals worth USD 5.6 billion were recorded during the quarter, reflecting an 18% rise in volumes and a 5% increase in deal values over the previous quarter. The sector contributed 14% of overall deal volumes and 33% of deal values in the Indian market during Q2.
As per the GT Bharat’s report, the quarter saw 57 private equity (PE) and venture capital (VC) deals valued at USD 1.9 billion, with fintech accounting for over 53% of the volume.
Fintech deals during the quarter reflected a mix of small and mid-sized investments, ranging from as low as USD 0.12 million to USD 202 million, indicating widespread investor interest across maturity stages.
Key transactions included a USD 202 million investment in Groww by GIC and ICONIQ Capital, and a USD 72 million round in Cred, backed by global investors including RTP Global, QED, Sofina, and GIC.
Despite the absence of large consolidations, fintech outperformed traditional sub-sectors in volume terms.
Further, Banking and NBFCs dominated deal values, led by marquee transactions such as Sumitomo Mitsui’s USD 1.57 billion stake in Yes Bank and Warburg Pincus and ADIA’s USD 862 million infusion into IDFC First Bank.
The fintech segment not only led deal counts but also contributed to a 76% jump in deal values over the previous quarter. With sustained interest in digital financial services, analysts expect continued momentum in the space, especially in lending, wealthtech, and embedded finance.
Meanwhile, insurance and TPA deals saw a sharp decline, and financial services and asset management saw a jump in values largely due to Mizuho’s USD 700 million stake in Avendus Capital.
The report notes that investors are increasingly targeting profitable, platform-based fintechs as macroeconomic conditions stabilize and interest rates in India begin a downward trend.
While fintech and banking & NBFCs continued to dominate, the report notes a growing investor interest in wealth and asset management, supported by platform scalability and improved profitability metrics.
The banking and NBFC sub-sector which continued to lead in terms of values since Q3 2023 (apart from Q1 2025), contributed the highest values for this quarter as well with a 66% share valuing USD 3 billion across 20 deals on the back of two high-value deals (>USD 500 million).
This included Sumitomo Mitsui’s USD 1.57 billion investment in Yes Bank for a 20% share (M&A) and Warburg Pincus and Abu Dhabi Investment Authority investment of USD 862 million in IDFC First Bank (PE). These two deals alone contributed an 81% share in the sub-sector’s overall values.