India deal values fall 60% in Jan 2026 to $7.2 bn as big-ticket M&A stalls

The month recorded 207 deals worth USD 7.2 billion, including IPOs and QIPs, marking an 11% decline in volumes and a 60% drop in values compared to December 2025.

India’s deal-making activity began 2026 on a cautious note, with overall transaction volumes and values declining sharply in January amid the absence of large-ticket mergers and acquisitions (M&A), according to Grant Thornton Bharat’s latest Dealtracker report.

 

The month recorded 207 deals worth $7.2 billion, including IPOs and QIPs — an 11% decline in volumes and a steep 60% drop in values compared to December 2025. Excluding public market activity, 199 deals worth $5.9 billion were announced, with volumes down 8% and values lower by 56% month-on-month.

 

The slowdown was largely driven by softer M&A momentum, even as private equity (PE) investments remained resilient and capital markets continued to see selective participation.

 

“January marked a measured start for India’s deal landscape due to the absence of large-ticket M&A transactions,” said Shanthi Vijetha, Partner – Growth, Grant Thornton Bharat, adding that policy continuity, infrastructure-led growth, and trade developments are likely to shape deal sentiment in early 2026.

 

M&A activity moderates without large deals

 

M&A transactions declined significantly in January, with 73 deals valued at $3.1 billion, reflecting a 33% drop in volumes from December and a 64% fall in value.

 

Despite the slowdown, deal value remained concentrated in a few large transactions. Coforge’s $2.4-billion acquisition of Encora alone accounted for nearly 40% of total M&A value, highlighting a selective environment where strategic deals continue to drive activity.

 

Private equity shows resilience

 

Private equity activity remained comparatively stable, recording 126 deals worth $2.7 billion in January.

 

However, the average deal size fell sharply from $43.3 million in December to $21.6 million, indicating investor preference for smaller growth-stage and expansion-capital investments.

 

The month also saw Juspay Technologies enter the unicorn club after raising $50 million, reinforcing continued investor confidence in India’s technology-driven startups.

 

Capital markets remain selectively open

 

Public market fundraising remained modest but active, with three IPOs raising $0.5 billion and five QIPs mobilising $0.8 billion, signalling that companies still have access to capital despite cautious market sentiment.

 

Sector-wise trends

 

Sectoral activity showed a mixed picture:

 

• IT & ITeS led deal values, driven primarily by the Coforge-Encora transaction.
• Retail and consumer sectors recorded the highest deal volumes (39 deals), though values declined.
• Banking and financial services saw a sharp value correction, while fintech remained active.
• Manufacturing saw healthy volumes but lower values, reflecting selective consolidation.
• Real estate recorded higher deal volumes but moderated values, including insolvency-led transactions.
• Energy and hospitality sectors showed selective strength, particularly in cleantech investments.

 

Outlook for 2026

 

The January slowdown reflects a normalisation in deal activity rather than weakening investor interest, with private equity continuing to deploy capital selectively.

 

As policy clarity emerges after the Union Budget and global trade developments evolve, deal-making activity is expected to regain momentum through strategic transactions, infrastructure investments, and innovation-led sectors in the coming months.   

“January marked a measured start for India’s deal landscape, due to absence of large-ticket transactions in the M&A space. While aggregate deal values moderated on a month-on-month basis, M& A deal activity remained selective and private equity demonstrating resilience through sustained volumes and continued engagement in growth and expansion capital. The visibility of IPOs and QIPs, despite a cautious market tone, reflects ongoing access to public capital. Going ahead, policy continuity, infrastructure-led growth, and capital formation priorities alongside expectations from the Union Budget 2026 and progress on the India–EU trade agreement are likely to shape dealmaking," said Shanthi Vijetha, Partner, Growth, Grant Thornton.

sentiment in early 2026.”