New Delhi, April 21
India's financial services sector displayed inherent resilience in the first quarter of 2026, as deal activity normalised after strong activity in the previous quarter, despite geopolitical tensions arising from the US-Iran conflict, a report has said.
As per the analysis by Grant Thornton Bharat, the industry recorded 61 deals worth $1.9 billion, showing a healthy consolidation phase. The report noted that in this figure, IPO and QIP transactions are excluded.
While deal values moderated due to the absence of large-ticket transactions, activity remained broad-based across segments, it added.
On a year-on-year basis, deal volumes saw only a marginal dip of 6 per cent, indicating sustained investor engagement despite global uncertainties.
Sequentially, the moderation in deal values was largely attributed to the high base effect of the previous quarter, which had witnessed multiple billion-dollar deals.
The report further highlighted that total deal volumes, including public market activity, stood at 63 transactions valued at $2 billion, signalling continued activity in capital markets.
Vishal Agarwal, Partner and Private Equity Group and Deals Structuring Leader at Grant Thornton Bharat, said the quarter reflects a "measured and cautious investment approach" amid evolving global dynamics.
He also highlighted that India's strong macroeconomic fundamentals, such as low inflation and steady growth, continue to provide a stable foundation for long-term investments.
Policy measures announced in the Union Budget 2026, such as easing foreign investment norms and efforts to deepen the bond market, are expected to further support deal activity going forward, he added.
Moreover, the mergers and acquisitions (M&A) segment witnessed a strategic recalibration, with 16 deals worth $0.3 billion. However, while the absence of large marquee transactions impacted aggregate values, domestic deals remained dominant, accounting for 81 per cent of volumes.
According to the report, private equity (PE) and venture capital activity saw 45 deals worth $1.6 billion. The segment accounted for a dominant 74 per cent of deal volumes and 84 per cent of total value, indicating sustained investor confidence in India's scalable financial platforms.
Notably, the quarter showed improvement on a year-on-year basis, signalling strengthening long-term investment trends. Investors remained focused on high-quality, scalable opportunities, particularly in credit-led and banking-aligned businesses.
Sector-wise, fintech continued to lead in terms of deal volumes, accounting for over half the transactions, driven by steady activity in emerging and innovation-led segments, while banking and NBFCs dominated deal value, contributing 55 per cent of the total.
- IANS
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