India’s deal activity showed resilience in February, with 278 transactions amounting to $5.4 billion, marking a 34% increase in volume compared to the previous month. The surge was primarily driven by private equity and venture capital participation, which accounted for 169 deals worth $2.8 billion, the highest monthly deal count in four years. While overall deal values saw a modest recovery, the increase in volumes indicates renewed investor confidence and broader capital deployment across various sectors.
Mergers and acquisitions also saw a resurgence, with 104 deals totaling $2 billion. Domestic M&A activities took the lead, characterized by strategic and scale-driven consolidation across core sectors. Domestic consolidation accounted for 69% of volumes and 78% of the total M&A value, reflecting a strong focus on local transactions.
Despite escalating geopolitical tensions in the Middle East and a weakening rupee posing risks to capital flows and cross-border sentiment, the report remains optimistic about continued deal activity in India. Factors such as strong domestic liquidity, resilient corporate balance sheets, and increasing global investor interest in India are expected to support deal activities in the coming years.
Private equity and venture capital activities played a significant role in driving deal momentum, witnessing a notable increase in volumes. However, the average deal size decreased to $16.6 million from $21.6 million in January, signaling a shift towards smaller-ticket investments. IPO and QIP activities experienced moderation, with three IPOs raising $436 million and two QIPs mobilizing $139 million, reflecting cautious sentiment in capital formation.
In terms of sector performance, Energy and Natural Resources stood out with volumes surging by 217% and values tripling month-on-month. Retail and Consumer sectors recorded the highest volumes, with 63 deals constituting a 23% share, although values declined by 38% due to decreases in textiles, FMCG, and personal care sectors. Infrastructure, aerospace, defense, and professional services witnessed increased traction, while real estate faced a sharp decline in the absence of large-ticket deals. Other sectors displayed mixed trends, with stable volumes but moderated values, according to the report.
