Fewer consumer deals, bigger conviction: Sector attracts $981 million in Q2
Grant Thornton Bharat says investors remain selective, with capital flowing into wellness, personal care, food processing and digital-first consumer brands
India's consumer sector witnessed a moderation in dealmaking activity during the April-June quarter of 2026, with deal volumes falling sharply amid a more selective investment environment. However, deal values remained resilient at $981 million, underscoring continued investor confidence in long-term consumption-led growth, according to Grant Thornton Bharat's latest Consumer Dealtracker on Monday.
The sector recorded 97 deals worth $981 million in Q2 2026, marking a 34% quarter-on-quarter decline in deal volumes and a 33% fall in deal value. Excluding IPOs and qualified institutional placements (QIPs), there were 95 mergers and acquisitions (M&A) and private equity/venture capital (PE/VC) transactions worth $918 million, with values remaining above the corresponding quarter last year.
According to the report, investors continued to favour high-growth consumer segments such as wellness, premium personal care, nutrition and digital-first brands, while companies increasingly used acquisitions to expand product portfolios and strengthen market presence. Grant Thornton Bharat said this reflects a structural shift in capital allocation towards specialised consumer categories.
M&A activity slowed during the quarter, with 20 deals worth $184 million, as the absence of large strategic acquisitions weighed on overall activity. Domestic transactions accounted for 65% of deal volumes and 58% of deal value, while inbound M&A gained momentum, with deal volumes doubling and values rising nearly fivefold, signalling sustained overseas interest in India's consumer market. The largest M&A transaction was Emami Ltd's acquisition of a 60% stake in IncNut Digital Pvt Ltd, which owns Vedix and Skinkraft, for $34 million.
Private equity and venture capital investments continued to dominate dealmaking, contributing 75 deals worth $734 million, or nearly 80% of total deal volumes and values. While funding activity moderated sequentially, investment values remained above Q2 2025 levels as investors focused on scalable businesses with strong unit economics. The biggest PE deal was Advent International's $150 million investment in Iscon Balaji Foods Ltd.
Public market fundraising remained muted, with just one IPO raising $47 million and one QIP raising $16 million, indicating continued caution among market participants.
Among key sectors, Retail Tech led M&A activity with nine deals worth $89 million, while Textiles & Apparel ($178 million), Food Processing ($172 million) and FMCG ($145 million) attracted the highest PE/VC investments. The report also noted that capital remained concentrated in a handful of high-conviction opportunities, with the top five M&A transactions accounting for 64% of total M&A value and the top five PE/VC investments contributing 54% of total investment value.