By Dev Chatterjee
India’s mergers and acquisitions (M&A) activity fell sharply in the March quarter, with total deal value dropping to $17 billion in 2026 year-to-date, the lowest for the period since 2021, according to Dealogic data.
The figure is nearly half of the $34.48 billion recorded in the same period last year, signalling a slowdown in large-ticket transactions. Deal volumes, however, were relatively resilient at 236 transactions compared with 310 a year earlier, indicating continued activity in mid-sized deals even as big acquisitions remained limited.
The data points to a shift in India’s M&A cycle towards volume-driven activity rather than value-led transactions. While a few marquee deals provided some support, the absence of multiple large transactions weighed on overall deal values during the quarter.
Notable deals
Among notable deals were stake sales in Indian Premier League franchises, underscoring sustained investor interest in premium sports assets despite broader caution in corporate deal-making. Bankers said the divergence reflects selective capital deployment in high-visibility assets even as overall sentiment remains subdued.
Sectorally, energy and power led deal activity with transactions worth about $2.68 billion, followed by construction and building at $2.61 billion. Technology deals amounted to $1.99 billion, while leisure and recreation and food and beverage segments recorded $1.92 billion and $1.90 billion, respectively.
Globally, M&A activity remained steady, with deal value at about $1.16 trillion in the first quarter of 2026, broadly unchanged from $1.15 trillion a year earlier, highlighting that the slowdown is more pronounced in India than in global markets.
What do advisers attribute the decline to?
Advisers attributed the decline primarily to heightened geopolitical uncertainty and tighter financial conditions, which have delayed decision-making on large transactions.
“The geopolitical situation for the last one year has been extremely fluid, initially with tariffs and, of course, recently with the war situation. Businesses cannot function in uncertainty and M&A transactions are major initiatives, which are obviously impacted. One of the key reasons for a drop is the geopolitical situation in the last one year,” said Ketan, managing partner at Katalyst Advisors LLP.
He added that macro-financial factors have compounded the slowdown. “Partly due to the geopolitical situation and partly because of the capital market and the FPI pullout from the market, the rupee depreciation has also had an important impact on businesses. Additionally, there have been certain domestic factors such as slowdown in demand in certain sectors such as FMCG and certain sectors like insurance having policy uncertainty; these are also some of the reasons that could have caused a drop in deals.”
Valuation gaps between buyers and sellers have also persisted, limiting closures. “One of the issues in deals is valuation expectations of buyers and sellers. In spite of certain dampening factors, the reset in valuations had not fully happened through the year, although of late the correction has been quite sharp. This valuation mismatch… has also contributed to the drop in deal values,” he said.
Foreign bankers indicated that prolonged geopolitical tensions, particularly in West Asia, could further weigh on deal-making. “The outlook for the rest of the year (2026) looks grim unless there is some drastic change in the geo-political situation,” said a banker, declining to be identified.