India’s Deal Activity Jumps 34% in February, Records 278 Transactions Worth $5.4 Billion

New Delhi — India’s deal activity remained strong in February, with 278 transactions valued at $5.4 billion, marking a 34 per cent sequential increase in volumes, according to a report by Grant Thornton Bharat released on Tuesday.

The report highlighted that the surge was largely driven by private equity and venture capital participation, which accounted for 169 deals worth $2.8 billion — the highest monthly deal count recorded in the past four years.

“While overall deal values saw only a modest recovery, the surge in volumes signals renewed investor conviction and broader capital deployment across sectors,” the report said.

Mergers and acquisitions also regained momentum during the month, with 104 deals valued at $2 billion. According to Shanthi Vijetha, Partner – Growth at Grant Thornton Bharat, domestic M&A activity dominated as companies pursued strategic expansion and consolidation across core sectors.

Domestic deals accounted for 69 per cent of total volumes and 78 per cent of the overall M&A value, underlining the strong role of local investors and companies in driving transaction activity.

However, the report noted that global uncertainties could pose risks to capital flows. Rising geopolitical tensions in the Middle East and the weakening of the Indian rupee may affect cross-border investor sentiment.

Despite these challenges, strong domestic liquidity, resilient corporate balance sheets and growing global investor interest in India are expected to support deal activity through 2026.

Private equity and venture capital deals remained the backbone of the market, though the average deal size fell to $16.6 million from $21.6 million in January, indicating a shift toward smaller-ticket investments.

Capital market activity also slowed slightly during the month. Three companies launched initial public offerings (IPOs), raising a combined $436 million, while two Qualified Institutional Placements (QIPs) mobilised $139 million.

Among sectors, energy and natural resources recorded the strongest performance, with deal volumes rising by 217 per cent and deal values tripling compared to the previous month.

Retail and consumer sectors saw the highest number of deals at 63 transactions, accounting for 23 per cent of total activity. However, the value of these deals fell by 38 per cent, largely due to activity concentrated in textiles, fast-moving consumer goods (FMCG) and personal care segments.

Infrastructure, aerospace and defence, and professional services sectors also gained momentum, while the real estate sector experienced a sharp decline due to the absence of large-ticket transactions.

The report added that other sectors witnessed mixed trends, with relatively stable deal volumes but moderated transaction values.

With inputs from IANS