Why Control Deals Are Rising in India and What They Unlock

India is making a clear shift toward buyouts and majority deals. As recently as 2022, nearly two-thirds of PE investments involved minority stakes. By 2024, buyout or majority deals had risen to 51% of all PE investments, up from 37% in 2022. That’s a meaningful structural move in a short time.

This matters because control deals change what you can fix, what you can scale, what you can buy, how you exit, and what kind of returns are even feasible. More than a bigger ownership percentage, control entails a different underwriting problem and a different toolset.

Why control is rising now

Start with the simplest driver: India’s market is maturing. In the past, minority investing made sense because many businesses were still early in institutionalisation, promoter-led governance was the default, and buyouts were harder to execute cleanly. India PE used to be more about acquiring non-control stakes and allowing existing management teams to run their business.

But India’s PE market is now big enough to support segmentation, with a growing universe of middle-market companies seeking capital. Once you have enough depth, strategies stop being one-size-fits-all. You get specialist playbooks, including control.

A second driver is global convergence. The US and Europe are overwhelmingly buyout markets, with ~85% of deals being full buyouts or add-ons. India is beginning to resemble that structure, because managers are importing the playbook and the ecosystem can finally support it.

A third driver is more subtle: control is a response to a tougher global environment. When easy multiple expansion is unreliable, investors lean harder on operational value creation. Control gives you the right to do the unglamorous work: professionalise finance, rationalise product lines, change pricing, fix working capital, upgrade leadership, and run M&A in a disciplined way.

The buyout turn is really a mid-market story

The headline trend is “more buyouts,” but the more investable point is where those buyouts are happening. Venture/early growth sits below $30 million in deal size, typically minority and higher risk. Large-cap deals are $100 million-plus, highly competitive auctions, and typically expensive. The mid-market sits in the $30–$100 million band, where profitability and regional leadership converge with real value-add opportunities.

This mid-market segment is where control can actually create an edge, because it’s less auction-driven, less crowded, and can offer a “superior risk-reward tradeoff” with multiple exit options including IPOs, strategic sales, and sales to larger PE funds.

And importantly: it is less crowded for a reason. Very few investors can orchestrate a leveraged buyout and manage a control investment in India. That capability constraint is what keeps white space open.

So if you’re looking for the underlying logic of the buyout turn, it’s this: the middle market is finally big enough and stable enough to support a control-style value creation model, and the skill set required to execute it is still scarce.

What control unlocks

Control unlocks institutionalisation at speed. Mid-market companies can have strong products, real profitability, and decent governance, but still operate with founder-era systems: informal decision rights, weak reporting, inconsistent KPIs, and ad-hoc hiring. Successful mid-market value creation happens as a result of institutionalising a small company culture while infusing large-company systems and resources. That is easier to do when you can set governance, hire or replace CXOs, and drive a cadence of operating reviews without negotiating every move. In this sense, control capital can transform a company.

Control deals will also help establish buy-and-build as a repeatable engine. The last leg of India’s journey to a full-fledged PE market is the adoption of the buy-and-build playbook. Buy-and-build needs control because integration is messy: systems, culture, pricing, procurement, supply chains, cross-selling. You don’t run that process if you don’t have majority ownership.

India is full of fragmented sectors where consolidation can create real value. But consolidation includes deal sourcing, diligence, post-merger integration, and the discipline to walk away at the right time. Control is what lets you run that like a repeatable process and not just a one-off.

There is also better exit optionality as control deals don’t only exit one way. The broader exit toolkit for mid-market strategies include IPO, strategic sale, secondary PE sale, and PE add-on sale. The key word is broader. Control assets can be positioned for multiple buyers because you can shape them into cleaner, more legible businesses. This matters in a world where exits are cyclical. More than a nice-to-have, exit optionality is a risk-management feature.

Why India is structurally set up for control strategies now

One reason the buyout turn is happening now is that India’s ecosystem has improved enough to support it. India has developed a deeper domestic pool of risk capital, stabilising equity markets and supporting a more predictable base for listings and exits. A stronger public market base matters because public markets remain the main go-to for PE/VC sponsors exiting portfolio companies through listings or sales to public acquirers.

That exit infrastructure matters for control strategies because control deals often depend on a clean, credible exit lane. When public markets are shallow or unreliable, control investing becomes a hostage to sponsor-to-sponsor sales. When markets are deeper, you can build to multiple endpoints.

The mid-market angle also matters here: many managers have graduated into large-cap deals, leaving a less crowded middle market with more white space. That’s an important dynamic. The best mid-market opportunities appear when you are early, relationship-driven, and willing to do operational work.

What the buyout turn unlocks for capital formation

If India’s private markets are moving toward control, it does two things for the broader ecosystem. First, it makes returns less dependent on macro tailwinds. A control-heavy market has more levers to create value even when public multiples don’t cooperate.

Second, it improves the “platform” nature of India PE. When managers can repeatedly acquire, build, integrate, and exit companies, you get a compounding effect: better talent, better governance norms, better exit readiness. Over time, that deepens the investable universe.

Bottom line

India’s buyout turn is real. The share of buyout and majority deals rose from 37% in 2022 to 51% in 2024. That shift is happening because India’s market has matured enough to support segmentation, because the mid-market offers less crowded white space, and because control is an effective way to drive operational value creation and buy-and-build strategies.

What control unlocks is straightforward: faster institutionalisation, repeatable consolidation, and broader exit options. But it comes with an equally straightforward warning: control strategies only work if you actually have the capability to run them. In India, that capability is still scarce, which is why this shift is interesting.

Research Analyst

Simran Mehla

Frequently Asked Questions

Q: What exactly is a control deal in India PE?

A: Typically a majority stake or other structure that gives the investor effective control over key decisions (board control, veto rights, management changes, capital allocation, M&A, and strategic direction).

Q: Where do control deals tend to be most feasible?

A: Often in companies with proven unit economics and operational stability, but with gaps in systems, governance, and professional management depth. That’s where institutionalisation can move the needle.

Q: Do control deals have better exit options than minority deals?

A: Not inherently, but control can make a company more “exit-ready” by professionalising reporting, governance, and scalability. That can widen the set of credible buyers in good conditions.

Q: What are the biggest risks in control strategies in India?

A: Execution risk (turnaround complexity), talent risk (leadership upgrades), integration risk (for buy-and-build), governance friction (especially with founders), regulatory and compliance risk, and exit timing risk.

Q: Why weren’t buyouts as common historically in India?

A: Historically, many companies were founder-led with governance and control dynamics that made buyouts harder to structure, and minority growth capital was often the more practical entry format. Recent commentary and market participants describe a gradual shift toward more control-oriented investing.

Sources

Morgan Stanley