Private Market Secondaries in India: What They Are, How They Work and Why They Are Growing

Private market secondaries in India are transactions in which investors acquire existing stakes in private companies or private-market funds from current shareholders, rather than providing fresh capital to the company or fund. As India’s private-capital ecosystem matures, secondaries are becoming an increasingly important mechanism for investor liquidity, portfolio rebalancing and access to established private assets.

What Are Private Market Secondaries?

A private market secondary is a transaction in which an existing investment in a private company or private-market fund changes ownership from one investor to another.

In a primary transaction, an investor provides fresh capital to a company or fund in exchange for newly issued shares or units.

In a secondary transaction, the capital goes to an existing shareholder who is selling some or all of an investment. The underlying company does not necessarily receive fresh capital.

The concept is already familiar in public markets. Most everyday stock-market trading is secondary: when an investor buys shares of a listed company, they are generally buying them from another shareholder, not from the company itself.

Private market secondaries apply the same basic principle to unlisted assets.

A secondary allows one investor to receive liquidity without requiring the underlying asset itself to exit.

How Do Private Market Secondaries Work in India?

A secondary transaction begins when an existing shareholder wants to sell an ownership position and another investor is willing to acquire it.

The seller could be a venture capital or private equity fund, founder, employee, angel investor, family office or institutional investor. The buyer could similarly range from another existing shareholder to a dedicated secondary fund or institutional investor.

Unlike listed shares, however, private shares do not trade on a standardised exchange.

Transactions therefore require diligence around the underlying asset as well as the security being transferred. Transfer restrictions, shareholder rights, preference structures, information rights, company approvals and transaction documentation can all affect what the buyer ultimately owns.

This makes private market secondaries both an investment-underwriting exercise and a transaction-underwriting exercise.

Why Are Private Market Secondaries Growing in India?

India has spent more than a decade building a substantial private-capital ecosystem.

Successive waves of PE and VC investment have created a growing stock of venture-backed companies, private-equity portfolios and fund interests that are now reaching later stages of maturity.

As a private market matures, its capital requirements change.

The first phase is largely about getting capital into companies. Eventually, the ecosystem also needs mechanisms for getting capital out and for transferring ownership between investors with different investment horizons.

India is increasingly reaching that stage.

Secondary transactions reached approximately ₹37,700 crore in 2025, growing 32% year-on-year, while average transaction sizes have increased almost fourfold since FY20, according to Oister Global’s analysis.

At the same time, founders, employees, early investors and fund LPs increasingly have liquidity requirements, while family offices, UHNIs and institutional investors are seeking access to established private assets.

A mature private market needs mechanisms not only for getting capital in, but also for moving capital between investors with different time horizons.

Why Would Someone Sell a Good Private-Market Asset?

One of the most persistent misconceptions around secondaries is that a shareholder selling an asset must know something the buyer does not.

That is possible, which is why seller motivation should always be understood. But there are many other reasons an investor may sell.

A venture or private-equity fund may be approaching the end of its fund life and need to return capital to LPs. An early investor may have already achieved its target return. A founder or employee may want personal liquidity after years of holding equity. An institutional investor may simply be rebalancing its portfolio.

None of these necessarily changes the prospects of the underlying company.

Public markets make this intuitive. Investors buy and sell shares in high-quality listed companies every day without assuming every seller has lost confidence in the business.

Private markets increasingly allow the same separation between an investor’s liquidity needs and an asset’s future prospects.

The seller’s timeline and the company’s timeline are not always the same.

A company can have years of growth ahead even when one investor’s journey with it is complete.

What Types of Private Market Secondaries Exist?

Private market secondaries can take several forms.

Direct secondaries involve purchasing shares in an individual private company from an existing shareholder. The seller could be a founder, employee, angel investor, VC fund, PE fund or another institution.

LP-led secondaries involve the purchase of an existing limited partner’s interest in a private-market fund.

GP-led secondaries are initiated by a fund manager and can involve moving one or more existing portfolio assets into a new vehicle, often providing existing investors with an option for liquidity while allowing others to continue holding the assets.

Globally, both LP-led and GP-led transactions have become significant markets. Jefferies estimates that global secondary transaction volume reached a record $240 billion in 2025, with LP-led transactions accounting for $125 billion and GP-led transactions for $115 billion.

The structures differ, but the underlying function is similar: ownership can change without requiring the underlying business itself to be sold.

Why Do Investors Buy Private Market Secondaries?

One potential advantage is greater visibility.

A company that has spent seven or eight years building itself typically has more evidence available than it did in year two: revenues, customers, margins, management execution, financing history and years of institutional scrutiny.

In a fund secondary, much of the underlying portfolio may already be known.

A second characteristic is later entry.

A secondary investor generally enters after part of the asset’s investment journey has already occurred. This can mean a shorter remaining holding period and potentially earlier distributions than investing at the beginning of the lifecycle.

That can also alter the traditional private-market J-curve. Instead of entering before years of deployment and value creation, the investor enters after some of that journey has already taken place.

A third consideration is access.

A high-quality private company may not need to issue new shares. An established fund manager may not have capacity for new LPs. But an existing shareholder seeking liquidity can create another route into the asset.

Secondaries can therefore provide access to companies, portfolios, managers and vintages that may otherwise be difficult to access through primary investment.

A secondary changes how an investor enters an asset; it does not change what makes the asset worth owning.

Are Private Market Secondaries Always Sold at a Discount?

No.

The assumption that secondary transactions inherently involve distressed assets or steep discounts is not supported by recent Indian transaction data.

EY analysed 306 concurrent primary and secondary transactions involving Indian new-age companies between 2019 and 2025. Approximately 85% of secondary transactions were priced similarly to the corresponding primary round. Where discounts occurred, the average discount was approximately 19%.

This does not mean price is unimportant. It means the headline discount should not become the investment thesis.

A 20% discount sounds attractive. But 20% below what?

A discount to a recent arm’s-length transaction is different from a discount to an old funding-round valuation or stale fund NAV. A large discount to an unrealistic reference value can still leave an investor overpaying.

Price the asset, not the discount.

How Should Investors Evaluate a Private Market Secondary?

A useful framework is to evaluate five things:

The asset comes first.

For a direct secondary, that means evaluating the company’s growth, economics, competitive position, management, governance and cap table.

For a fund secondary, it means looking through to the underlying portfolio: where the value sits, how concentrated it is, how the companies are performing and how much of their value-creation journey remains.

A secondary can create a different route into an investment. It cannot turn an average asset into a great one.

How Do Secondaries Improve Liquidity in Private Markets?

Private companies do not have the continuous liquidity mechanism that stock exchanges provide to listed businesses.

Traditionally, investors therefore relied heavily on an IPO, acquisition or buyback to generate liquidity.

Secondaries create another route.

An existing investor can realise some or all of an investment while another investor continues holding the same asset.

That becomes increasingly valuable as private-market ecosystems mature because different investors rarely have identical timelines.

India’s broader exit environment illustrates this evolution. PE and VC investors realised $32.9 billion across 257 exits in 2025, the second-highest annual exit value on record, according to EY. Strategic exits represented almost half of total exit value.

But an IPO or acquisition does not need to be the only moment when ownership changes.

Secondaries separate investor liquidity from company liquidity.

That is one of their most important functions in a mature private market.

How Large Is the Global Secondary Market?

Private market secondaries have already developed into a major institutional asset class globally.

Jefferies estimates global secondary transaction volume reached a record $240 billion in 2025, up 48% year-on-year.

Dedicated secondary capital reached a record $327 billion, while total available secondary-market capital, including traditional LP capital and leverage, was approximately $477 billion.

The buyer base is also expanding. Jefferies reported that the ten largest investors represented only half of transaction volume in 2025 as smaller buyers, specialists and new entrants increased their participation.

The global experience suggests secondaries tend to become more important as the stock of private assets grows and investors require more sophisticated ways to manage liquidity.

How Large Could Private Market Secondaries Become in India?

India remains earlier in the development of secondaries than markets such as the US and Europe, but several conditions for expansion are now present.

There is a growing stock of mature PE- and VC-backed assets. Founders, employees, early investors, funds and LPs increasingly require liquidity. Family offices and institutional investors are looking for ways to access more mature private companies. And dedicated secondary managers are emerging.

Oister Global is currently raising its third ACE secondaries fund, following two oversubscribed predecessor vehicles. Other managers have also entered or expanded within the category.

This matters because the development of dedicated capital makes secondary transactions more repeatable.

What was once an opportunistic way of creating liquidity can gradually become part of the infrastructure of the private market itself.

Every mature private-market ecosystem eventually needs a secondary market capable of keeping pace with the primary market that created it.

India increasingly appears to be entering that phase.

The Oister View: Why Private Market Secondaries Matter for India

The growth of private market secondaries in India is ultimately not a story about investors wanting to leave private markets.

It is a story about private markets developing the ability to transfer ownership.

India has spent more than a decade building the primary side of its private-capital ecosystem. As those investments mature, investors will increasingly enter and leave assets at different stages of their lifecycle.

A functioning secondary market allows that to happen without requiring every shareholder to wait for the same IPO, acquisition or other exit event.

That is why the question “Why would anyone sell a good asset?” only tells half the story.

A good asset can have a willing seller and a willing buyer at the same time. Their investment horizons, liquidity requirements and return objectives can simply be different.

For the buyer, the more important questions remain the fundamental ones:

Is this an asset worth owning? Is the price attractive? And is the remaining journey worth underwriting?

That is the role secondaries can increasingly play as India’s private markets mature.

Junior Research Analyst

Kartik Goel

Frequently Asked Questions

Q: What are private market secondaries in India?

A: Private market secondaries are transactions in which an investor purchases an existing stake in a private company or private-market fund from another shareholder rather than investing fresh capital directly into the company or fund.

Q: What is the difference between a primary and secondary investment?

A: A primary investment provides new capital to a company or fund in exchange for newly issued ownership. A secondary investment transfers existing ownership from one investor to another.

Q: Why do investors sell shares in good private companies?

A: Investors may sell because of fund-life constraints, portfolio rebalancing, founder or employee liquidity requirements, return realisation or different investment horizons. A shareholder’s decision to sell does not necessarily imply a negative view of the underlying asset.

Q: Are private market secondaries always available at a discount?

A: No. EY’s analysis of 306 concurrent primary and secondary transactions found that 85% of secondary transactions were priced similarly to their corresponding primary rounds. Discounts occurred in 15% of the transactions analysed, with an average discount of approximately 19%.

Q: What are the potential benefits of private market secondaries?

A: Potential characteristics include greater information about mature assets, later entry into the investment lifecycle, potentially shorter remaining holding periods, earlier distributions and access to private companies or funds that may otherwise be unavailable.

Q: What are the risks of investing in secondaries?

A: Secondary investors remain exposed to business, valuation, governance, liquidity and execution risks. Investors must also evaluate transfer restrictions, shareholder rights, security structures, legal documentation and the realistic path to future liquidity.

Q: What is the difference between direct and fund secondaries?

A: A direct secondary involves purchasing shares in an individual private company. A fund secondary involves purchasing an existing interest in a private-market fund or participating in a GP-led transaction involving existing fund assets.

Sources

Jefferies, 2025 Global Secondary Market Review: Another Record-Breaking Year. Global secondary volume reached $240 billion in 2025, up 48% year-on-year, with $327 billion of dedicated secondary capital. (Jefferies.com)

EY India, Rethinking secondary transaction discounts in Indian start-ups. EY analysed 306 concurrent primary and secondary transactions; 85% were priced similarly to primary rounds, while transactions involving a discount had an average markdown of 19%. (EY)

EY-IVCA, Private Equity and Venture Capital Trendbook 2026. India recorded $32.9 billion across 257 PE/VC exits in 2025, the second-highest annual exit value on record. (EY)

Oister Global, No IFs About AIFs III and The Unlisted Intel: Why Would Anyone Sell a Good Asset?