Auto deal activity falls to 3-year low; capital flows to EV, mobility firms

India's automotive sector recorded $717 million worth of deals in the April-June quarter, with investors favouring fewer but larger transactions in EVs, mobility and automotive technology

India's automotive sector recorded deals worth $717 million during the April-June quarter of 2026, even as transaction volumes fell to their lowest quarterly level in three years, reflecting a more selective investment environment with capital flowing into technology-led mobility and electric vehicle (EV) businesses.

 

The sector witnessed 20 mergers and acquisitions (M&A), private equity (PE) and public market transactions during the quarter. While deal volumes declined from the preceding quarter, total deal value fell by just 4 per cent sequentially, indicating that investors continued to back fewer but larger, high-quality transactions.

 

Excluding public market activity, the sector recorded 18 M&A and PE/venture capital (VC) deals worth $479 million, with investments concentrated in mobility platforms, automotive technology companies and EV ecosystem players.

 

"While deal activity slowed during the quarter, investment remained focused on businesses driving the future of mobility," said Saket Mehra, partner and Auto & EV Industry Leader, Grant Thornton Bharat.

 

"We are seeing continued interest in EVs, mobility platforms and automotive technologies, with investors becoming more selective and backing companies that have demonstrated scale, differentiated capabilities and a clear growth path. As the sector evolves, technology-led investments are expected to continue shaping deal activity," he said.

 

M&A activity remained subdued, with five deals worth $138 million during the quarter. The biggest acquisition was KPIT Technologies' $120-million purchase of Israel-based Cymotive Technologies, underscoring the growing strategic importance of automotive cybersecurity, software-defined vehicles and connected mobility. Despite lower deal volumes, average deal sizes increased significantly as companies prioritised technology-led capability building over scale-driven expansion.

 

Private equity and venture capital activity also moderated, with 13 deals worth $341 million. Funding remained concentrated in a handful of large transactions, led by Rapido's $240-million fundraise, the largest deal of the quarter, followed by JBM Ecolife Mobility's $47-million investment. The trend reflects sustained investor confidence in scalable mobility platforms and businesses driving the next phase of electrification.

 

Mobility-as-a-Service emerged as the largest segment by value, attracting $298 million of investments. EVs accounted for 54 per cent of PE deal volumes, highlighting continued investor interest in India's electrification ecosystem. Auto technology represented 87 per cent of total M&A value, as companies stepped up investments in software, cybersecurity and connected mobility capabilities.

 

According to Grant Thornton Bharat, the top five PE transactions accounted for nearly 96 per cent of total PE investment value during the quarter, reflecting investors' preference for category-leading companies with demonstrated scale and clearer growth prospects in a tighter funding environment.