India's Deal Activity Surges 34% in Feb, Hits $5.4 Billion Across 278 Transactions

The report from Grant Thornton Bharat said the surge was led by private equity and venture capital participation, which recorded 169 deals worth $2.8 billion, the highest monthly deal count in 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 regained traction with 104 deals totalling $2 billion. Domestic M&A dominated, with strategic and scale-driven consolidation as a defined theme across core sectors," said Shanthi Vijetha, Partner, Growth, Grant Thornton Bharat.

Domestic consolidation dominated, accounting for 69 per cent of volumes and 78 per cent of total M&A value.

Escalating geopolitical tensions in the Middle East alongside a weakening rupee, introduce incremental risks to capital flows and cross-border sentiment. "Despite these uncertainties, strong domestic liquidity, resilient corporate balance sheets, and growing global investor preference for India will likely support continued deal activity in 2026," Vijetha said.

PE/VC activity anchored deal momentum, with significant rise in volumes but average deal size fell to $16.6 million from $21.6 million in January, indicating a shift toward smaller-ticket investments.

IPO and QIP activity showed moderation with three IPOs raising $436 million, and two QIPs mobilising $139 million, reflecting selective capital formation amid cautious sentiment.

Energy and Natural Resources led performance, with volumes rising 217% and values tripling month-on-month.

Retail and Consumer recorded the highest volumes with 63 deals (23 per cent share), though values declined 38 per cent, driven by textiles, FMCG and personal care.

Infrastructure, aerospace and defence, and professional services gained traction, while real estate declined sharply in the absence of large-ticket deals. Other sectors showed mixed trends with stable volumes but moderated values, the report noted.

- IANS