2025 in review: How India pharma rewired its deal playbook

India’s pharmaceutical sector has continued to attract sustained investor interest, even amid periods of broader market volatility. Private equity (PE) investments and M&A activity averaged more than $3.5 billion annually and remained robust through 2024 and the first nine months of 2025.

In 2024, approximately 61 deals with an aggregate value close to $4 billion were executed. Momentum continued into 2025, with around 41 deals totalling $2.7 billion announced in the first nine months of the year, and additional transactions expected to close in the final quarter.

Why investor interest in Indian pharma remains strong

Investor interest in the pharmaceuticals is underpinned by several structural advantages. Global demands for essential medicines remain largely non-cyclical, offering resilience even through economic slowdowns, supported by India’s strong export economics driven by competitive cost structures and operating scale. High regulatory entry barriers further strengthen the sector’s moat, with US- and EU-approved active pharmaceutical ingredient (API) and formulation facilities limiting new competition.

At the same time, Indian pharma companies are moving decisively up the value chain. Many are shifting beyond conventional generics toward higher-value, innovation-led segments such as complex generics, specialty pharmaceuticals, and biopharma. This transition is being supported by rising research and development (R&D) investments and increasingly global growth ambitions.

From scale to capability-led consolidation

The Indian pharma sector is beginning to mirror global consolidation trends, with recent M&A activity reflecting a strategic shift toward acquiring capabilities, regulatory strength, and specialty therapies, rather than adding scale alone. M&A accounted for more than 65% of total deal value in 2024—driven largely by Mankind Pharma’s acquisition of Bharat Serums—and approximately 34% of deal value in 2025.

Recent domestic consolidations highlight a clear pivot toward capability-building and scale. Transactions such as Torrent Pharma’s acquisition of JB Chemicals (announced in October 2025) underscore buyers’ focus on chronic therapies, branded formulations, and differentiated portfolios rather than pure  scale- or volume-led expansion in commoditized generics.

Cross-border activity reflects a similar strategy, with Indian players acquiring niche platforms in biopharma, and wellness to expand adjacencies and accelerate international growth.

Meanwhile, private equity investments continue to target defensible niches such as health and wellness, animal health and specialty, reinforcing confidence in long-term sector fundamentals.

Sector interest: Deal mix in 2025

While deal activity spanned the sector, the first nine months of 2025 saw formulations and contract development and manufacturing organizations (CDMOs) account for the largest share of transactions—approximately 37% and 24% of total deal count, respectively. API and animal health each accounted for around 2%, while biopharma (10%) and other health products, services, and technology-led segments (24%) comprised the balance.

Capital markets remained an important backdrop for the sector. The NSE Healthcare Index, which has an approximately 80% pharma weighting, delivered gains of around 50–53% in 2024, even though gains in 2025 were muted.

Despite temporary index volatility in the past few years promoters and PEs have remained active in tapping into the IPO market both from exits and capital raises. Key transactions include the listings of Sai Lifesciences ($370 million), Emcure Pharmaceuticals ($235 million), and Akums Drugs and Pharmaceuticals ($225 million) in 2024, as well as Anthem Biosciences ($410 million) and Sudeep Pharma ($100 million) in 2025. In addition, draft red herring prospectuses (DRHPs) have been filed for Corona Remedies (which has since moved ahead with its IPO), Sai Parenterals, and Allchem Lifesciences, among others, indicating that IPO-bound activity is likely to continue well into 2026.

The next deal wave: Platforms, CDMOs, and nutraceuticals

Looking ahead to 2026, the life sciences sector is expected to see increased platform-led acquisitions, sponsor-driven exits, and mid-sized bolt-on transactions as companies pursue selective scale. Some trends we expect to see are:

• Domestic formulations entering a consolidation cycle, driven by chronic disease growth (cardiac, diabetes and neuro), focus on specialty or fast-growing segments (oncology, orthopaedic, women’s health), portfolio rationalization (carve outs of non-core portfolio) and investor platform creation (private equity interest in creating India-focused branded generics platforms).
• API could see a higher mix of deal activity more specifically in specialty and complex chemistry that command higher margins and a supply chain moat.
• Deals in CDMO (contract development & manufacturing organization) will continue to grow as global pharma and PE funds chase high-quality sterile, peptide, fermentation, and HPAPI (highly potent active pharmaceutical ingredient) capacity to tap India’s cost advantage, regulatory credibility, and export demand.
• Biologics and biosimilar deals were historically muted because of high capex requirement, higher regulatory risk, lack of scaled assets that pushed most activity toward global partnerships rather than domestic M&A. With large pharma companies focused on building biologics capacity this trend will change in next three to five years.
• Nutraceuticals becoming India’s fastest-growing health category, powered by e-commerce, youth fitness culture, preventive healthcare, and a strategic portfolio shift for pharma companies from prescription (RX) to over-the-counter (OTC).

(Disclaimer: This article is based on publicly available information and the author’s proprietary market insights. Deal data and transaction insights have been sourced from VCCEdge and supplemented by Alvarez & Marsal’s market work. The analysis reflects market trends and observations as of September 2025 and is intended for general informational purposes only. It does not constitute investment, legal, or financial advice.)