India’s automotive and mobility sector is firmly back in the fast lane, recording a sharp resurgence in deal activity in the first quarter of 2025.
According to the latest Grant Thornton Bharat Automotive Dealtracker, the quarter saw 29 deals worth USD 1.5 billion, signalling renewed investor confidence and strategic focus despite the absence of mega IPOs. Stripped of outliers like Hyundai Motor’s USD 3.6 billion listing in Q4 2024, the underlying data tells a compelling story of rising momentum—deal volumes rose 27% quarter-on-quarter, while values surged by 191%.
This upswing, driven by a blend of domestic consolidations, strategic cross-border interest, and landmark private equity investments, reflects the sector’s ongoing transformation. Electrification, digitalisation, and sustainability continue to reshape the mobility landscape—and investors are taking note.
A Sector at an Inflection Point
Saket Mehra, Partner and Auto Industry Leader at Grant Thornton Bharat, said, “India’s automotive and mobility sector is undergoing a pivotal transformation. Electrification, digital integration and the shift toward sustainability are now central to the strategic agendas of companies and investors alike. Despite global trade uncertainties and supply chain bottlenecks, the surge in deal values and volumes indicates robust market confidence.”
According to Mehra, the imperative for Indian players is clear: to stay competitive, they must intensify efforts around innovation, strategic partnerships, and value-added offerings, particularly in high-growth areas such as EVs, auto components, and Mobility-as-a-Service (MaaS).
M&A Activity Gains Pace With Domestic Focus
India’s mergers and acquisitions (M&A) landscape continued its upward trajectory, registering 9 deals worth USD 359 million in Q1 2025—the third consecutive quarter of growth. The bulk of this activity was domestically driven, focusing on localisation strategies and portfolio consolidation. The average deal size jumped from USD 5 million in Q4 2024 to USD 31 million, underscoring the growing scale of strategic collaborations.
Among the top M&A highlights:
- Minda Corporation’s USD 161 million acquisition of a 49% stake in Flash Electronics India
- Fontana Gruppo (Italy) acquiring 60% in Right Tight Fasteners for USD 115 million
These deals, primarily targeted at building EV-centric capabilities—especially in energy storage and battery management—reflect the industry's push towards future-readiness and manufacturing self-reliance.
Private Equity Powers Ahead With Billion-Dollar Deal
The private equity and venture capital space saw a dramatic acceleration, with 19 deals totalling USD 1.12 billion—a six-fold increase in value and a 36% rise in volumes over the previous quarter. This growth was spearheaded by a headline-grabbing USD 1 billion investment in Erisha E Mobility Pvt Ltd by an undisclosed UAE-based investor, which single-handedly raised the quarter’s average deal size to USD 59 million.
Despite the dominance of this one deal, the broader activity remained vibrant, with 80% of deals below USD 10 million, pointing to sustained enthusiasm in early- and growth-stage companies. The spread of these deals across EV manufacturing, charging infrastructure, autotech platforms, and sustainable mobility solutions signals growing investor appetite for scalable innovations.
Capital Markets Pause After Blockbuster Quarter
While Q1 2025 saw no IPOs following Hyundai Motor’s massive listing the previous quarter, capital market activity wasn’t entirely dormant. PMI Electro raised USD 29 million through a Qualified Institutional Placement (QIP) to fund its strategic expansion, technological upgrades, and product development.
Though subdued, this activity reflects continued institutional investor interest in companies with robust innovation pipelines and high-growth trajectories—particularly in green mobility and EV ecosystems.
Building On Strong Foundations
With investment volumes rebounding, strategic partnerships gaining momentum, and sustained PE interest across emerging mobility segments, India’s auto sector is poised for continued expansion. While global headwinds may persist, the fundamentals remain strong, supported by a vibrant innovation ecosystem and increasing alignment with sustainable and digital-first mobility trends.
If Q1 is any indication, 2025 may well prove to be a defining year for India's auto and mobility space—driven not just by deal volumes, but by smart capital aligned with transformative change.
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