India’s tech investments shift to value-focused AI and automation deals: Report

New Delhi: India’s technology deal landscape saw a strong rebound in the third quarter (July–September) of 2025, with 80 transactions worth $1.48 billion, a 33 per cent rise quarter-on-quarter (QoQ), signalling a shift from volume-led activity to value-driven, theme-focused investments, according to a report released on Monday.

The report by business advisory firm Grant Thornton Bharat said high-value deals exceeding $50 million quadrupled during the period, reflecting investors’ growing focus on sustainable enterprise models and cross-border scalability.

The resurgence comes amid global macroeconomic adjustments and renewed investor appetite for artificial intelligence (AI), software-as-a-service (SaaS), and enterprise automation — areas viewed as the foundation for scalable, platform-led growth.

Mergers and acquisitions (M&A) accounted for 29 deals worth $743 million, marking a 239 per cent increase in value QoQ, driven primarily by domestic acquisitions in AI and automation-based tech services.

“Q3 2025 reflects a clear shift in India’s tech ecosystem, with investors and acquirers prioritising value-driven, infrastructure-focused deals in AI, SaaS, and enterprise automation. The next wave of breakout companies is expected to emerge from deep tech and Al-native infrastructure,” said Raja Lahiri, Partner and Technology Industry Leader at Grant Thornton Bharat LLP.

Outbound transactions also saw a surge, with three high-value deals exceeding $100 million contributing 87 per cent of the total value.

Private equity and venture capital activity logged 50 deals worth $584 million, a 39 per cent increase in volume and a 172 per cent jump in value from the previous quarter, driven by early and mid-stage funding in enterprise solutions and analytics.

However, the tech sector’s public market activity remained subdued, with only one IPO and no qualified institutional placements (QIPs) during the quarter. While deal volumes were limited, the report noted that the larger transaction sizes reflect selective yet high-value investor interest.

The absence of QIP issuances highlights a cautious approach among listed tech firms amid ongoing valuation adjustments, it added.

Earlier this month, Equirus Securities forecast that India’s largest IT companies would post modest QoQ revenue growth in their second-quarter earnings. The firm noted that while broader macroeconomic concerns could curb incremental tech spending, steady demand, improving deal conversions, and favourable currency movements may support overall growth.

IANS

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