India Buyouts Shift: Majority Control Now Key

India's private equity landscape is witnessing a structural evolution, with a pronounced shift towards majority control in buyout transactions. A recent report highlights that 71% of respondents now favor acquiring a majority equity stake (51% or more), signaling a move towards governance-led value creation.

Ownership transitions are the primary catalyst for this market activity. Family business succession issues account for 49% of the increased buyout opportunities, with promoter and founder exits contributing another 46%. This indicates a generational shift and maturing business landscape.

Investor focus is increasingly directed towards unlisted companies, with 78% preferring them for buyout deals due to greater flexibility in operational transformation and governance alignment. The healthcare and pharma sector has emerged as the most attractive for buyouts, cited by 31% of respondents. This is followed by Banking, Financial Services, and Insurance (BFSI) at 19% and Technology & Internet at 17%.

While Limited Partners (LPs) show increased engagement with buyouts, capital allocation remains disciplined, prioritizing GPs with strong track records and demonstrated exits. Co-investment participation is measured, occurring occasionally rather than frequently.

India's buyout market, currently valued at approximately USD 5 billion annually, has significant room for growth compared to global benchmarks. Experts predict this segment will become a fast-growing part of India's private capital over the next decade.