INDIA Trends and Developments Contributed by: Sidharrth Shankar and Rishabh Gupta, JSA
clear post-investment playbook, and network access to mentors, specialised talent, potential customers, as well as further funding pools. From a fund formation perspective, LPs are now more willing to back emerg - ing managers with cohesive strategies, provided they demonstrate edge through founder access, sectoral visibility or operational track records. Meanwhile, established GPs are reorganising internal teams to reflect sector-specific accountability. As capital becomes more selective, so too does the nature of competition. GPs with sectoral depth are increasingly winning deals not just on pricing, but on strategic alignment and founder comfort. In this new paradigm, thematic precision is not just a positioning tool but a core determinant of portfolio quality, and eventual outcomes. In addition, environmental, social and governance (ESG) considerations have moved from a compliance tick-box to a value creation tool. Impact-focused investing is gaining traction, with funds targeting sec - tors such as financial inclusion, renewable energy and sustainable agriculture while vetoing sectors and targets with a poor ESG scorecard. Blended finance models, which combine concessional capital with commercial PE, are also seeing early adoption in India. The sectoral landscape for PE in India continues to evolve, reflecting shifts in macroeconomic priorities, policy support and investor appetite. Capital con - tinues to flow into a blend of traditional high-return sectors and emerging, innovation-driven industries. Noteworthy sector highlights include the following. • Healthcare and Pharma – 2025 sees continued enthusiasm for healthcare, a sector that combines defensibility with scale. PE funds are actively consolidating multi-speciality and single-specialty platforms (oncology, IVF, diagnostics) and backing pharma contract development and manufacturing (CDMO) players. Hospital chains are capitalising on demand through inorganic expansion, and planning IPOs, often following multi-year PE partnerships. From healthcare providers and diagnostic chains to health-tech platforms, medical devices companies and active pharmaceutical ingredients (API) manu -
facturers, the sector continues to see robust deal activity and attract high multiples. • Consumer Brands and FMCG – VC funding into niche and audience-focused brands in consumer segments such as apparel, food service, jewellery and accessories, baggage and travel, fast-moving consumer goods (FMCG), and nutraceuticals, among others, continues to be a bright spot, driven by quick commerce volumes, increased private consumption, evolving consumer behaviour, and selective discretionary income, even as some older brands lose momentum. Consumer brands with digital distribution, strong direct-to-consumer (D2C) metrics, and offline scale-up potential remain the first port of call. • Electric Mobility and Cleantech – From battery storage platforms to electric vehicle (EV) infra - structure, this sector remains a magnet for growth capital, particularly as several domestic start-ups are emerging, with a focus on research and devel - opment of new technologies, seeking to reduce reliance on rare earth elements and environmen - tally harmful chemicals. • SaaS and AI Start-Ups – Global-scale enterprise software-as-a-service (SaaS) companies and AI- led workflow automation tools are drawing strong interest despite higher burn led by rising human resource costs and some valuation resets. • Fintech 2.0 – Compliance-first, business-to- business (B2B) fintech models in areas such as wealth-tech and insure-tech are gaining favour as hot-spots for PE activity. Further, 2025 is seeing a pivot towards non-traditional segments: SME lend - ing, housing finance, insurance tech, and supply chain financing. Many funds are choosing to invest in licensed NBFCs, acquiring control or structuring bespoke financing deals, as navigating regulatory clearances becomes easier. • Agritech and Food Supply Chains – Efficiency plays in India’s vast agriculture and food sector are emerging as long-term bets, both in terms of premium-ised doorstep delivery in large cities, and broad-based procurement and supply chains aggregation across the country.
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