PRIVATE CAPITAL MARKETS seem to be buzzing, the turbulent global geopolitical landscape notwithstanding. Interestingly, it’s private equity (PE), not venture capital (VC), that’s emerging as the flag bearer of renewed investor enthusiasm. But there’s a catch — the focus is on mature companies instead of the traditionally vibrant startup ecosystem.

VC activity cooled off significantly in the first half of this year. According to a CB Insights report, venture investments in the first half of 2025 fell by 21% year-on-year to $5.7 billion — a pace that puts the year on track for a five-year low.

PE, meanwhile, saw a less severe drop. Deal volumes slipped by 8% year-on-year. However, the drop in total equity investments was sharper, down 36% to $5.6 billion in the first half.

Yet, July has brought in a fresh momentum, as PE deals began to pick up pace. This shift signals renewed investor appetite, particularly for opportunities in consumer-focussed enterprises, hinting at brighter prospects for the private capital landscape.

The sweet deal

One of the deals that stood out was that of patisserie chain Theobroma, popular for its decadent brownies and cakes. It sold 90% of its stake to PE firm ChrysCapital. The deal value of ₹2,410 crore includes the full exit of the existing investor, ICICI Venture, which held a 42% stake acquired in 2017 for ₹130 crore. The promoters, the Messman sisters, retain the remaining 10% stake. Citing ChrysCapital’s interest in The Belgian Waffle Co., reports suggest that the PE firm may place a strategic bet on quick-service restaurant (QSR) platforms for diversification.

VIP in the bag

Close on the heels of the Theobroma deal, Indian baggage giant, VIP Industries, saw its controlling stake being sold to a consortium of investors led by PE firm Multiples. After leading the market for half a century, the listed travel accessory company let go of 32% of the shareholding pie for ₹1,763 crore, a decision fuelled by the younger generation’s disinterest in running the business, founder Dilip Piramal had stated.

“These exits are critical for the (private market) ecosystem,” says Neha Singh, chairperson and managing director, Tracxn. “Even earlier this year, we saw Minimalist (a skincare brand) being acquired. It wasn’t your traditional VC-backed company, but it showed that consumer brands are achieving scale and becoming attractive exit stories.”

Even as Singh draws attention to the thinning deal volumes, she also highlights the increasing number of M&A exits, especially compared to 2023. She equates the strategic takeover seen in Theobroma and VIP Industries to the PE playbook seen in the U.S. “This is a typical PE model. You do a majority acquisition, grow it, and resell it after a few years,” she elaborates.

To Pune, via Canada

Beyond the consumer sector, healthcare also witnessed a PE-led consolidation last month. Temasek-backed Manipal Health Enterprises acquired Pune-based Sahyadri Hospitals from the Ontario Teachers’ Pension Plan for a staggering ₹6,000 crore. The deal paves the way for Manipal’s expansion into western India with 11 hospitals, bringing its national network to 49 facilities. While the spotlight is on the acquirer’s PE backing, the transaction, marking an exit for Ontario Teachers’, a pension fund, validates Singh’s views on the role of M&A as a reliable path to liquidity.

Even though these high-ticket deals put consumer-centric brands in focus, investor optimism has not waned in certain verticals. Sectors catering to the digital landscape still possess potential, says Elaine Tan, senior manager, LSEG Deals Intelligence. “Despite the year-on-year decline, select sectors demonstrated strong momentum. Internet-specific and computer software companies led the charge, attracting over $3.4 billion combined, up 16.1% and 3.2%, respectively, underscoring sustained investor confidence in the country’s digital growth engine.” According to LSEG, nine out of the Top 10 PE investments in India that took place in the first half of 2025 were tech-related.

Yet, the three big transactions of July total $1.23 billion, which is more than one-third of the $3.4 billion that went to tech-related companies. This proves that investments in mature consumer-related and healthcare companies cannot be overlooked.