India's pharma, healthcare deal value holds firm at $13.9 billion in Q1 FY27 despite 17% drop in deal volume: Grant Thornton Bharat

India's pharmaceutical and healthcare sector witnessed a slowdown in deal activity during Q1 FY27 (April-June 2026), with transaction volumes falling to a four-quarter low. However, overall deal value remained resilient at $13.9 billion, supported by strategic outbound acquisitions and sustained investor interest in innovation-led healthcare businesses, according to Grant Thornton Bharat's latest Pharma and Healthcare Dealtracker.

 The sector recorded 65 deals worth $13.9 billion during the quarter, with deal volumes declining 17% quarter-on-quarter. Despite the moderation, investment value remained elevated, led by Sun Pharmaceutical Industries' $11.8 billion acquisition of Organon & Co., the largest overseas acquisition ever by an Indian pharmaceutical company. Excluding the marquee transaction, overall deal value still rose 12% sequentially, indicating sustained underlying investment momentum across the sector.

Commenting on the findings, Bhanu Prakash Kalmath S J, Partner and Healthcare Industry Leader at Grant Thornton Bharat, said Indian companies are increasingly pursuing acquisitions that strengthen specialty portfolios, expand global market access and build differentiated capabilities rather than merely adding scale. He added that investor interest continues to centre on AI-enabled care, genomics, oncology and advanced diagnostics, with strategic acquisitions and targeted investments expected to remain the primary drivers of deal activity going forward.

Outbound acquisitions propel record M&A activity

Mergers and acquisitions (M&A) emerged as the key growth driver during the quarter, with 35 deals worth $13.2 billion. While overall sector deal activity moderated, M&A transaction volumes rose 17% quarter-on-quarter to their highest level in the past four quarters, with deal values touching an all-time high.

 Outbound transactions accounted for 96% of total M&A value, highlighting Indian pharmaceutical companies' growing focus on expanding specialty portfolios, strengthening innovation capabilities and deepening their presence in regulated overseas markets. The quarter also saw a revival in inbound activity with four transactions, while domestic deals continued to account for the bulk of M&A volumes.

Private capital targets biotech, precision medicine and AI-driven healthcare

Private equity and venture capital (PE/VC) activity moderated to 26 deals worth $444 million, with transaction volumes declining 42% from the previous quarter. Even so, deal values remained broadly stable as investors favoured fewer but larger investments. Nearly 89% of disclosed PE transactions were below $50 million, reflecting continued preference for targeted growth capital rather than large-scale funding rounds.

Investor interest remained concentrated on biotechnology, precision medicine, preventive healthcare, wellness and innovation-led businesses, while public market fundraising stayed steady with two IPOs raising $58 million and two qualified institutional placements (QIPs) mobilising $161 million. Fundraising was led by Krishna Institute of Medical Sciences' $156 million QIP and Sai Parenteral's $44 million IPO.

 Among key sector trends, Pharma & Biotech led overall activity with 23 deals worth $12.7 billion, while Hospitals recorded nine deals worth $255 million, with deal values surging 254% quarter-on-quarter. Health Tech logged three M&A deals worth USD 573 million, led by IKS Next Horizon's acquisition of TruBridge, alongside nine PE investments in digital healthcare platforms. Women's health, fertility, oncology, genomics, advanced diagnostics and AI-enabled healthcare remained among the most sought-after investment themes.