India’s consumer and retail sector continued to attract investors in the first half of calendar year (CY) 2026, but appetite for large-ticket mergers, acquisitions and private equity (PE) investments weakened as global uncertainty made investors more selective.
According to Grant Thornton Bharat, the sector recorded 240 mergers and acquisitions (M&A) and PE transactions during H12026, making it the third-highest first-half deal count since the post-pandemic recovery began in CY2022. However, the cumulative value of these transactions fell to $2.3 billion—the lowest first-half deal value in six years.
By comparison, H12025 saw 256 transactions worth $4.6 billion, while H12022 recorded 297 deals valued at $7 billion, reflecting the strong investment momentum following the pandemic.
The sharp decline in deal values suggests that while strategic and financial investors remain committed to India’s long-term consumption story, they are avoiding large bets amid geopolitical tensions, elevated global interest rates and persistent uncertainty around consumer demand.
According to Naveen Malpani, partner and consumer industry leader at Grant Thornton Bharat, capital is increasingly flowing to specialised, high-growth segments as firms look to consolidate their positions.
“Businesses operating in wellness, premium personal care, nutrition and digital-first consumer brands are attracting disproportionate investor interest as changing consumer preferences create new growth opportunities. Companies are also using acquisitions more strategically to expand into adjacent categories and strengthen their portfolios,” he said.
Recent transactions reflect this trend. Marico acquired D2C snack brand 4700BC and plant-based nutrition label Cosmix in January and February this year for Rs 226 crore each. Separately, its wholly-owned Southeast Asia subsidiary acquired Vietnamese D2C personal care brand Skinetiq for Rs 350 crore. Emami, meanwhile, acquired a 60% stake in IncNut Digital—the parent company of D2C personal care brands Vedix and Skinkraft—for Rs 321 crore in May.
Industry experts say geopolitical conflicts, volatile commodity prices and uncertainty in global financial markets have prompted PE funds to prioritise capital preservation over aggressive deployment.
“The investment environment has clearly shifted from growth-at-any-cost to profitability and resilience,” said Ankur Bisen, senior partner at The Knowledge Company (formerly Technopak Advisors). “Investors are focusing on businesses with predictable cash flows, stronger governance standards and clear pathways to profitability. Large leveraged transactions have become fewer.”
The shift is also evident in recent investments. L’Oréal acquired a majority stake in Innovist, the parent company of D2C personal care brands Bare Anatomy and Chemist at Play, in June, for Rs 4,000 crore. PE investor Advent International picked up a minority stake in Iscon Balaji Foods for Rs 1,300 crore in May.
Another trend shaping the consumer deal market is greater valuation discipline. While many founders continue to seek premium valuations anchored in the funding boom of 2021 and 2022, investors have become far more selective in pricing businesses, leading to longer negotiations and smaller deal sizes.
“The number of conversations hasn’t reduced significantly, but deal closures are taking longer as buyers undertake deeper diligence and negotiate harder on valuations,” said a Mumbai-based investment banker. “Quality assets continue to attract interest, but investors are no longer willing to overpay simply to gain exposure to the consumer sector.”
Despite the decline in deal values, industry executives remain optimistic about the medium-term outlook. India’s favourable demographics, rising disposable incomes, premiumisation trends and continued formalisation of retail are expected to sustain deal activity, even as investors remain disciplined in deploying capital.
