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India's IPO market has shown strong momentum in 2025, emerging as a key exit route for private equity (PE) investors, according to KPMG's Pulse of Private Equity Q3'25 report.
The report noted that India's stock markets have performed exceptionally well so far in 2025, creating a favourable environment for IPO activity. Companies operating in in-demand sectors have achieved strong exit-day multiples, often higher than those available in other jurisdictions. "This has led more PE firms to target India-based IPO exits for their portfolio companies -- particularly companies based in India or with strong roots in India," noted the report This strength in capital markets has encouraged a growing number of private equity firms to pursue IPO exits in India for their portfolio companies, particularly those headquartered in India or with strong domestic roots. The presence of a robust base of domestic institutional investors with a strong appetite for PE-backed assets has further supported this trend. KPMG noted that the improving IPO environment comes at a time when private equity investment in India has experienced short-term softness in 2025 due to geopolitical and trade-related uncertainties. Despite this, India continues to be viewed as an attractive PE destination, supported by strong macroeconomic fundamentals, a large working-age population, and growing domestic consumption. The report added that the revival in IPO activity is particularly significant for the broader PE ecosystem, as exit volumes globally have remained subdued in recent years. In India, however, the strength of equity markets is helping unlock value for PE investors and providing a viable pathway for exits. Looking ahead, KPMG expects the current dip in PE investment to be temporary, with interest in India-based assets projected to rise over the next few years. A sustained improvement in IPO activity is expected to play a critical role in driving future PE dealmaking and exits in the country. (ANI)
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