At first glance, India’s dealmaking numbers for the first quarter of 2026 look contradictory. Deal volumes are at record highs, yet total deal values have dropped sharply. According to Grant Thornton Bharat’s latest Dealtracker, India recorded one of its highest-ever quarterly deal volumes—686 to 710 deals worth $16–20 billion in Q1 2026, even as total values declined 48% due to a sharp fall in large transactions.
“The moderation in value was largely driven by a sharp drop in large deals, with only two billion-dollar transactions worth $4.1 billion compared with seven such deals worth $15 billion in Q4 2025. Public market fundraising also slowed during the quarter, with IPO and QIP issuances declining 63% in volume and 78% in value as investors adopted a cautious stance,” said the report.
From big-ticket deals to smart capital allocation
The most striking shift is in deal size.
While volumes rose 5% sequentially, total deal values fell as billion-dollar deals dropped from seven in Q4 2025 to just two in Q1 2026.
This tells us that investors—both global and domestic—are no longer chasing scale blindly. Instead, they are:
Spreading capital across multiple opportunities
Focusing on mid-sized, scalable businesses
Prioritising capital efficiency over aggressive expansion
Even average deal sizes in private equity have declined significantly, reinforcing this shift.
Private equity still believes in India—and so should you
One of the strongest signals comes from private equity.
Despite global headwinds, 415 PE deals worth $9.1 billion were recorded in the quarter, showing sustained investor confidence.
However, overall values declined 34%, reflecting a shift towards smaller deal sizes. The average deal size declined to $21.8 million from $36.3 million in the previous quarter. Despite the moderation in values, investor interest in high growth companies remained strong, with three new unicorns emerging during the quarter. Neysa Networks, Juspay and Neo Asset Management collectively raised USD 703 million. The quarter also saw notable investments including Arya.ag raising $81 million in a Series D funding round and Aditya Birla Housing Finance securing USD 299 million, one of the largest primary capital raises by an unlisted housing finance company in India.
Key Sector Trends
1. Retail and Consumer led deal activity with 145 transactions, accounting for 21% of total deal volumes
2. Pharma, Healthcare and Biotech recorded 75 deals, making it the second most active sector by volume
3. Manufacturing followed with 71 transactions, reflecting continued consolidation and capacity led acquisitions
4. IT and ITES emerged as the largest sector by value with 66 deals worth $3.5 billion, accounting for 22% of total deal value
5. Energy and Natural Resources recorded 44 deals worth $2.2 billion, supported by sustained investments in renewables and power generation
6. Media and Entertainment saw 23 deals worth $2 billion, largely driven by the $1.8 billion acquisition of Royal Challengers Bengaluru by an Aditya Birla led consortium
7. Across sectors, Agriculture and Forestry and Professional Services recorded growth in both deal volumes and values, while sectors such as automotive, hospitality and real estate showed mixed trends reflecting varied investment sentiment across industries.
Mergers and Acquisition landscape:
M&A activity remained steady in terms of volumes during the quarter, though deal values declined due to the absence of large strategic transactions. A total of 271 M&A deals worth $6.9 billion were recorded in Q1 2026, with values falling 59% quarter on quarter.
Domestic transactions continued to anchor activity, accounting for 193 deals worth $2.7 billion. Inbound M&A values declined to $334 million, the lowest level since Q3 2023. In contrast, outbound dealmaking emerged as a strong area of activity, recording 56 transactions and contributing 56% of total M&A value. This reflects the growing confidence of Indian companies in pursuing international expansion despite ongoing global uncertainties. A key highlight of the quarter was Coforge’s $2.4 billion acquisition of Encora, one of the largest IT services deals by an Indian company.
“While deal values moderated amid the absence of large-ticket transactions and subdued capital markets, the underlying momentum—particularly in outbound M&A, private equity volumes, and the emergence of new unicorns—reflects sustained confidence in India’s long-term growth story,” said Shanthi Vijetha, Partner, Growth, Grant Thornton Bharat.