Buyouts, once seen as a niche strategy in India’s predominantly minority-led private equity (PE) landscape, have not only matured but are increasingly shaping how capital influences technology, AI, and next-generation businesses.
According to an EY report, buyout deals in November 2025 alone accounted for the highest investment value at $2.1 billion, ahead of startup investments at $1.7 billion.
Since 2020, buyouts have ranked third among investment strategies, after startup investments at $80.6 billion and growth investments at $76.8 billion, totalling $47.5 billion across 174 deals. This accounts for 19% of overall PE and venture capital investments in the pure-play PE asset class.
Technology Leads the Buyout Charge
The composition of these investments indicates areas of increased activity. Since 2020, the technology sector has dominated buyouts by both value and volume, accounting for $20.1 billion across 35 deals. Financial services accounted for $6.9 billion, followed by pharmaceuticals at $4.7 billion.
Together, these sectors accounted for 67% of all buyouts during the period. Healthcare, industrial products, and retail and consumer products also feature meaningfully, but the tilt toward technology highlights how digital transformation has become central to investing in India.
At the IVCA Buyouts Summit held in Mumbai on February 10, Anurag Gupta, Leader of EY-Parthenon India, the strategy consulting arm of EY, observed that value creation in Indian buyouts is “increasingly defined by operational depth, execution discipline, and long-term readiness for exit.” That shift, several leaders suggested, reflects both market maturity and an evolution in private equity.
From Minority Capital to Control Partnerships
For investment management company Blackstone, the pivot toward control in India was intentional. Senior Managing Director Amit Dalmia said the firm “started our office in India in 2005,” but “in 2012 is when we pivoted towards control strategy.” Since then, it has executed more than 40 control-oriented investments in Asia, delivering IRRs of 20%+ or more, with India emerging as one of its best-performing geographies.
Reflecting on the broader market, Dalmia described three phases in India’s PE journey—an early period of experimentation, a decade of consolidation, and, post-2020, what he calls a “phase of acceleration” in terms of “deployment velocity” and larger Asia-focused funds.
A crucial enabler of this acceleration, he noted, has been ecosystem development. “Earlier, if the founders were not confident of ceding control to the PE funds, because PE funds were not ready,” he noted, adding that today, “PE funds have invested in the operating capability, developed the management network. So there’s a whole ecosystem which kind of works well with everybody.”
In several instances, he explained that founders who retained 20-30% stakes created “significantly more than what the 100% stake would have created,” reinforcing the partnership model that underpins modern buyouts.
For Bain Capital, the shift toward buyouts has been less about abandoning minority stakes and more about embedding value creation at the core of underwriting. Ashish Kotecha, Partner at Bain, remarked, “If you think about the journey of private equity in India, it often did start off with minority stakes,” but over time the firm moved toward “probably more buyouts and more control.”
What has remained constant, he noted, is the internal focus on value creation. “Today, a third of our team in India is what we call the portfolio group, or the value creation team,” he said, adding that a portfolio team member sits on every investment committee so that “right from the beginning, there is a lens on what it is that we’re really going to do with these businesses.”
AI Imperative in Value Creation
Operational depth is particularly in focus in technology and AI-driven businesses. Dalmia described Blackstone’s framework as “buy right, build right, and sell right,” with value creation anchored in revenue acceleration, operational excellence, tech transformation, M&A, and leadership strength.
Technology, he stressed, is no longer merely a sectoral bet but a horizontal capability that can “fundamentally change the business model.” He cited examples of companies, including Mphasis, Sona Comstar, and IBS Software, that transitioned from licensed software to SaaS models or repositioned themselves within electric-vehicle supply chains, generating outsized returns through structural transformation rather than incremental improvement.
AI, however, has introduced both urgency and nuance. Dalmia drew a sharp distinction between companies where AI poses “an existential issue” and those where it can be used to “either double the growth rate or… reduce your cost by half.” Across portfolios, he said, five features define an effective AI strategy: “top-down commitment, a business-first approach, a clear ROI, recognition of data as an asset, and a clear path to scale.”
Kotecha echoed the need for selectivity. In sectors such as IT services, he added, AI’s impact is structural and shapes even investment decisions. “There’s a bunch of investment decisions we now make around that,” he noted. In other sectors, firms are following a “test and learn” approach, piloting functional use cases such as customer service automation or coding copilots before scaling proven applications across portfolios.
For Kotecha, value creation itself is not static. “You have to think of value creation as a living, breathing document,” he said, emphasising that underwriting assumptions must be refreshed as competitive environments and macro conditions evolve.
Resilience Through Cycles
The data reinforces the strategy's resilience. After an all-time high of $18 billion in buyouts in 2021, activity fell sharply in 2022, down 79% year over year, according to the EY report. Yet 2023 saw a 98% rebound to $7.4 billion. By November 2025, buyouts had reached $4.1 billion, accounting for 43% of the previous year’s total of $9.6 billion.
Volatility reflects macroeconomic headwinds, but the broader trajectory remains intact: investors are increasingly comfortable underwriting operational transformation and long-term value creation.
Taken together, the EY report and the IVCA discussions suggest that India’s buyout market has entered a new phase—one defined less by financial structuring and more by operational intensity, digital reinvention, and partnership-led control. For technology and AI-driven startups navigating a reset in public markets and venture funding, buyouts are increasingly central to the next chapter of scale, transformation, and exit.
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