India’s pharmaceutical and healthcare sector witnessed a big slowdown in deal exercise within the second quarter of 2025, with total transaction worth plunging 62% from the earlier quarter, in response to a brand new report from Grant Thornton Bharat. The variety of offers additionally fell, albeit extra modestly, to 57 from 67.
Whole deal worth stood at $1.3 billion, sharply down from $2.1 billion in Q1 2025. Whereas the decline is partly attributable to the absence of mega-mergers, the info additionally displays a broader shift in capital being allotted away from expansionist performs and towards extra surgical bets on specialised, scalable platforms.
“The moderation in dealmaking this quarter isn’t a surprise given the excessive base set in late 2024 and early 2025,” stated Bhanu Prakash Kalmath S J, Companion and Nationwide Chief – Healthcare at Grant Thornton Bharat. “What we’re seeing now could be a shift from development for development’s sake to consolidation, focus, and institutional readiness.”
A post-boom actuality test
The slowdown marks a reversal from the frothy dealmaking seen during the last 12 months. In This fall 2024, whole deal worth had surged to $6.9 billion, pushed largely by the $5 billion Aster DM–High quality Care merger. That single deal accounted for almost 80% of the quarter’s M&A price, setting a excessive watermark that has not been matched since.
In distinction, Q2 2025 featured no offers above $500 million, other than Biocon’s $523 million certified institutional placement (QIP)—a fundraise fairly than an acquisition. With out giant anchor transactions, total values compressed regardless of regular underlying deal circulate.
M&A volumes held up, with 23 offers within the quarter—solely two fewer than in Q1—however whole disclosed worth fell a staggering 86% to $208 million. The drop additionally displays restricted transparency: almost three-fourths of M&A offers didn’t disclose deal worth.
Pharma and biotech lead in worth, not quantity
Regardless of the broader pullback, pharma and biotech remained probably the most value-heavy section, accounting for 40% of Q2 deal worth resulting from Biocon’s QIP alone. Past that, the sector noticed targeted consolidation in formulations, contract manufacturing, biologics, and nutraceuticals.
Notable offers:
- Emcure Prescription drugs acquired a 20% stake in Zuventus Healthcare for $84 million.
- Solar Pharma picked up an 18% stake in Pharmazz Inc, a US-based biotech agency, for an estimated $25 million—a uncommon outbound transfer in an in any other case domestically concentrated quarter.
- Chromo Labs acquired Cohance Lifesciences’ CR Bio unit, signalling curiosity in CDMO capabilities.
On the cross-border entrance, exercise softened. Outbound M&A fell from seven offers to 3, with worth dropping from $1.3 billion to simply $35 million. Inbound exercise was non-existent for the primary time since Q3 2022.
Non-public fairness focuses on depth, not breadth
The personal fairness and enterprise capital (PE/VC) panorama confirmed extra resilience. Deal volumes fell to 33 from 42, however whole worth inched as much as $580 million, led by two high-conviction bets:
- Basic Catalyst, together with PB Fintech and an undisclosed investor, invested $218 million into PB Healthcare Companies.
- Introduction Worldwide deployed $175 million into Felix Prescription drugs, a platform in pharma manufacturing.
These two offers alone accounted for almost 68% of the quarter’s PE worth, highlighting a capital focus development the place traders are backing fewer, however bigger, extra institutionalised platforms.
Different mid-sized investments included:
- CureBay Applied sciences ($21 million) and Mosaic Wellness ($20 million), each digital-first healthtech startups.
- Paras Healthcare acquired a $20 million infusion from 360 One WAM, reinforcing PE curiosity in regional hospital chains.
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Hospitals stay the favorite
Throughout each M&A and PE, hospitals remained probably the most institutionally favoured asset class. Traders are drawn to their scalability, steady demand patterns, and clear monetisation paths—whether or not by means of working leverage, consolidation synergies, or public listings.
The sector is evolving alongside two distinct tracks: multispecialty chains consolidating to realize scale, market share, and IPO readiness. Single-speciality suppliers are increasing by means of asset-light, replicable fashions in Tier II and Tier III cities.
M&A offers akin to PVP Ventures’ 56% stake in Optimus Oncology and PE bets on PB Healthcare sign continued investor perception in hospitals as high-visibility, medium-risk performs.
The buyer-facing aspect of healthcare—comprising diagnostics, healthtech, and wellness—accounted for almost half of all Q2 transactions by quantity. The momentum right here is pushed by three converging forces:
- Rising client consciousness and health-seeking behaviour
- Progress in preventive care and early prognosis
- Acceleration of digital and home-based supply fashions.
M&A exercise in diagnostics targeted on regional consolidation. Metropolis Healthcare’s acquisition of Dr. Ahuja’s Pathology and Imaging Centre is a working example. PE traders are additionally warming to structured digital platforms with specialised choices—akin to power care, psychological well being, and gender-specific wellness—over generic well being apps.
Wellness, lengthy an appendage of client well being, is starting to emerge as a standalone funding theme, notably in intestine well being, D2C dietary supplements, and hormone-based therapies. The section stays small in worth, however deal circulate is rising and turning into extra focused.
Regardless of the sharp drop in quarterly values, analysts and traders see no purpose to panic. As a substitute, they interpret the numbers as a part of a maturing funding cycle, the place capital is turning into extra discerning.
“There’s nonetheless a robust urge for food for healthcare, however the bar has moved,” stated a accomplice at a worldwide personal fairness agency. “We’re previous the spray-and-pray section. Now it’s about vertical specialisation, platform integration, and visibility into monetisation.”
Based on Grant Thornton, the medium- to long-term outlook stays bullish. The mixture of a big underserved inhabitants, bettering care infrastructure, and digital penetration will proceed to draw funding. However traders are prone to prioritise:
- Management offers over minority stakes
- Home consolidation over outbound forays
- Platforms with IPO potential over early-stage experiments.
“India’s healthcare story isn’t cooling—it’s getting extra disciplined,” stated Kalmath. “The main focus is shifting to high quality over amount, depth over breadth.
Edited by Kanishk Singh
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