India’s automotive and Electric Vehicle (EV) deal activity remained steady but selective in the first quarter of 2026, with private equity (PE) investors driving a sharp recovery in deal values even as strategic mergers and acquisitions (M&A) slowed, according to Grant Thornton Bharat’s latest Dealtracker report.

The sector recorded 35 deals worth $745 million in Q1 2026, largely flat sequentially compared to 34 deals in Q4 2025, while deal values moderated from $837 million due to the absence of large-ticket transactions.

There were no IPO or QIP transactions during the quarter, reflecting a cautious capital market environment and a broader normalisation in outbound deal activity.

PE drives value recovery as EV bets intensify

Private equity emerged as the primary driver of deal-making, accounting for 28 deals worth $702 million, translating into a 12% rise in volumes and an 86% surge in values sequentially.

Investments remained concentrated in future-facing segments, with electric vehicles accounting for 11 deals (~$448 million) and mobility-as-a-service platforms contributing 9 deals (~$210 million).

Large investments in companies such as PMI Electro Mobility Solutions, GreenCell Mobility and Drivn Transition underscored continued investor conviction in scalable EV-led business models.

“India’s auto and EV sector is entering an inflection point, driven by improving domestic demand, accelerating electrification, and a growing focus on supply-chain resilience amid evolving geopolitical dynamics,” said Saket Mehra, Partner and Auto and EV Industry Leader, Grant Thornton Bharat.

He added that policy support is strengthening the EV ecosystem, particularly across energy storage and infrastructure, with investors increasingly prioritising electrification, mobility platforms and enabling technologies.

M&A activity weakens amid lack of large deals

In contrast, M&A activity remained subdued with just 7 deals worth $43 million, marking a 22% decline in volumes and a steep 91% drop in values compared to the previous quarter.

The decline was largely due to the absence of large cross-border and strategic transactions, with deal-making restricted to smaller, capability-led acquisitions focused on technology and ecosystem expansion.

Domestic transactions dominated the landscape, while outbound activity remained limited. During the quarter, Cars24 Services completed two acquisitions in the auto-tech space to deepen its presence across the vehicle ownership lifecycle.