India M&A activity value drops 44.5% to $17.4 bn in Q1; domestic deals fall 63.3%: LSEG

India’s dealmaking activity started 2026 on a subdued note, with overall mergers and acquisitions (M&A) witnessing a sharp decline in value and volumes amid global uncertainty and cautious investor sentiment, according to data from London Stock Exchange Group (LSEG) Deals Intelligence.

Total dealmaking involving India stood at $17.4 billion in the first quarter of 2026, marking a 44.5% decline compared to a year ago. The number of announced transactions also dropped 30.4% year-on-year, making it the slowest first quarter for deal activity since 2021.

Elaine Tan, Senior Manager at LSEG Deals Intelligence, said the year opened on a cautious footing. “Dealmaking in India opened 2026 on a cautious note, with M&A deal value down 21% year on year, reflecting softer momentum as the number of announced transactions declined 32% compared to the same period last year,” she noted.

Top-end deals fall to five worth $6.5 bn vs seven worth $15.4 bn YoY

She added that activity at the top end of the market remained limited, with only five deals above $1 billion totaling $6.5 billion, compared to seven such deals worth $15.4 billion a year earlier.

Despite the overall slowdown, a handful of large transactions continued to shape the deal landscape, reflecting investor interest in specific sectors.

As per the LSEG data, the largest transaction was the $1.8 billion deal involving Royal Challengers Sports Pvt Ltd in the media and entertainment space, followed by the $1.6 billion acquisition of the Safeway Concessions portfolio by VINCI Highways.

In the consumer segment, Devyani International’s $1.1 billion deal for Sapphire Foods India reflects continued consolidation in the food and beverage retail space. This was followed by two $1 billion transactions—Indovida India in the materials sector acquired by EPL Ltd, and Nxtra Data in the technology space backed by an investor group.

Tech, infra, and consumption sectors lead

According to Tan, deal activity is increasingly concentrated in select sectors. “Recent announced deals point to a rotation toward high technology, industrials, retail, and consumer-linked sectors, which together accounted for over 54% of India’s M&A value in the first quarter of 2026,” she said.

High technology emerged as the top sector, with deal value reaching $2.9 billion, up 40.8% year-on-year and accounting for 16.6% market share. Industrials followed with $2.65 billion (up 20.1%), while energy and power deals declined sharply to $2 billion, down 72.1%.

This trend reflects growing investor focus on themes such as data infrastructure, artificial intelligence adoption, transport networks, and food and beverage consumption.

Domestic deals slump, inbound activity rises

A closer look at deal composition reveals diverging trends. Domestic M&A activity declined sharply by 63.3% year-on-year to $9.1 billion, indicating weaker local consolidation.

In contrast, inbound M&A rose 65.9% to $7 billion, marking the highest first-quarter total since 2024. The United States remained the largest foreign acquirer of Indian assets, accounting for 38.7% of inbound deal value. It was also the top overseas destination for Indian companies, capturing 53.2% of outbound M&A, although outbound deal value declined 46.8% to $1.2 billion.

Private equity, big-ticket deals remain muted

Private equity-backed M&A transactions totaled $5.5 billion, down 20.8% from a year earlier, reflecting a cautious stance among financial investors amid valuation concerns and macro volatility.

Large deals were also fewer, with only five transactions exceeding $1 billion in Q1 2026, highlighting the slowdown in big-ticket activity.

While M&A activity weakened, equity capital markets showed resilience. IPO proceeds rose 8% year-on-year, with total ECM issuance holding steady at nearly $6 billion.

“India remained a leading global IPO destination, accounting for approximately 8% of worldwide IPO proceeds despite ongoing market volatility,” Tan noted. The IPO activity was supported by sectors such as industrials, energy, retail, and materials.