India’s financial services sector demonstrated resilience in the first quarter of 2026, with 61 deals totaling $1.9 billion, according to a report by Grant Thornton Bharat. Despite geopolitical tensions from the US-Iran conflict, deal activity normalized after a strong previous quarter. Deal values slightly decreased due to the absence of large transactions, but activity remained diverse across segments.
The report highlighted that deal volumes only saw a marginal 6% decline year-on-year, indicating sustained investor engagement amidst global uncertainties. The moderation in deal values was mainly due to the high base effect of the previous quarter, which saw multiple billion-dollar deals. Total deal volumes, including public market activity, reached 63 transactions valued at $2 billion, showing continued activity in capital markets.
Vishal Agarwal, Partner at Grant Thornton Bharat, noted a cautious investment approach in the quarter amid evolving global dynamics. He emphasized India’s strong macroeconomic fundamentals, like low inflation and steady growth, providing 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 boost deal activity.
In the mergers and acquisitions (M&A) segment, there were 16 deals worth $0.3 billion, with domestic deals accounting for 81% of volumes. Private equity (PE) and venture capital activity totaled 45 deals worth $1.6 billion, representing 74% of deal volumes and 84% of total value. The quarter saw a year-on-year improvement, indicating strengthening long-term investment trends, particularly in credit-led and banking-aligned businesses.
Fintech led in deal volumes, driven by activity in emerging and innovation-led segments, while banking and NBFCs dominated deal value, contributing 55% of the total.
