Secondaries Are Now Built Into the System

A recent EY study shows that secondary transactions are becoming a routine part of how capital flows through India’s private market ecosystem. In an analysis of 273 concurrent transactions where primary and secondary trades occurred around the same time, 85% were executed at the same valuation. This implies that these weren’t distressed or discounted sales, they were planned liquidity events priced in line with market confidence.

Even in the 15% of deals that did involve a discount, the average markdown was ~20%. More crucially, this figure held steady regardless of company size, stake sold, or buyer profile. That consistency suggests secondaries are being priced with method and intent, not urgency. The lack of sharp variance points to a market that treats secondaries as a strategic tool, not a distressed exit route.

One of the most notable findings in the EY report is how resilient pricing remained during the COVID period (2020–2021). Even amid global uncertainty and investor caution, average discounts on secondaries were slightly lower (18%) than in other years (24%). This indicates that secondaries are now transacted in a pricing band governed more by market structure than by momentary sentiment.

The report also found no meaningful difference in discounts based on:

• Whether the buyer was a new investor or existing one
• The size of the stake sold
• The overall valuation of the company

This absence of sharp variance further reinforces the idea that secondaries are governed by norms and pricing logic, not by perceived desperation. In other words, these are not one-off, opportunistic events, they are being priced and executed as part of a functioning private capital system.

These findings challenge an older narrative, that secondaries occur only under pressure, or with material valuation haircuts. Instead, what the data shows is a system where secondaries are integrated into standard cap table management, and where the terms of liquidity reflect confidence, not compromise.

Importantly, the data suggests that secondaries are no longer confined to specific company profiles or deal dynamics. Whether it’s a $100M company or a unicorn, a 1% stake or a 10% stake, the pricing trend holds, underscoring growing predictability in how secondaries are evaluated.

Whether for early investors realigning portfolios, or for funds actively managing hold periods, the growing prevalence and pricing consistency of secondaries indicate a broader market evolution. They have moved from edge case to ecosystem fixture.

As India’s startups scale further and private market cycles stretch longer, the importance of predictable, fair-value liquidity will only increase. The EY data makes it clear: secondaries are part of the infrastructure – priced with discipline, transacted with confidence, and increasingly essential to how capital moves through the private ecosystem.

This trend aligns with a global shift in how liquidity is being managed across long-hold portfolios. As IPO timelines stretch and M&A markets fluctuate, secondary transactions allow capital to circulate within the private domain, unlocking value without waiting for binary outcomes.

What also stands out is the lack of pricing variation between new and existing investors. In earlier cycles, insiders often enjoyed preferred access and terms. The EY data shows that parity has emerged, with secondary pricing holding steady regardless of who the buyer is. That levels the playing field and builds broader confidence in the integrity of these trades.

Taken together, the data makes a clear case: secondaries are no longer a workaround. They’ve become a standard mechanism to manage cap tables, provide early liquidity, and support long-term company building. As private companies stay private longer and fund cycles stretch, these transactions are becoming a part of the core infrastructure of modern private capital.

For GPs, that means a new lever for active portfolio management. For LPs, it signals more flexible exit options within fund timelines. And for founders and teams, it reinforces that taking liquidity through structured secondaries no longer signals weakness, it is simply part of how professional capital now works.

The normalization of secondaries also expands access to a broader class of buyers. From cross-stage VCs to newer secondaries-focused funds, the space is becoming more diverse, without sacrificing pricing discipline.

The EY report also reflects a broader ecosystem insight: as secondary volumes increase, they’re enabling the recycling of capital in a way that supports both portfolio renewal and early-stage funding. In other words, secondaries are helping bring velocity to India’s private capital stack, connecting mature capital with fresh opportunity.

At the same time, it’s worth underscoring that the vast majority, ~85%, of secondary transactions are priced at par with the primary investments. That means most secondaries clear at the same valuation as the company’s latest fundraise, without any discount at all. For the remaining 15% where a discount is applied, the ~20% average remains stable across deal types and investor profiles. The predictable nature of discounts makes it easier for fund managers to underwrite and execute these transactions without triggering value concerns.

This dual insight, that most secondaries trade at full value, and those that don’t follow a consistent discount band, gives institutional investors a clear pricing benchmark. It removes ambiguity, simplifies underwriting, and affirms that secondaries in India are being executed with the same discipline and transparency as primary rounds.

Another takeaway from the data is that secondaries are not overly sensitive to transaction size. That means smaller and mid-sized funds, as well as emerging managers, can participate in these deals without worrying that pricing will shift against them due to scale. That kind of access democratizes liquidity and reduces concentration risk for the ecosystem.

In the years ahead, secondaries will play an even more central role in balancing capital efficiency with investor flexibility. And as the EY data shows, India is well on its way to building a mature, repeatable, and trusted market for secondary transactions.

To understand the power and global context of secondaries, explore The Global Secondaries Market & Preview and The Secret Life of Secondaries.

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