India’s technology sector witnessed a significant uptick in the second quarter of 2026, with 80 deals amounting to $2.5 billion. Deal volumes surged by 18% compared to the previous quarter, reaching their highest level since Q1 2025, as per a report by Grant Thornton Bharat. However, the report highlighted a 35% decrease in deal values, attributed to the absence of major outbound acquisitions that had bolstered Q1 2026.
Technology deal volumes soared to a five-quarter peak, driven by increased participation in mergers and acquisitions (M&A) and private equity investments, particularly focusing on AI, cloud, cybersecurity, and digital engineering capabilities. The report also noted a robust activity in start-up M&A, marking its strongest performance in six quarters, indicating a rising interest in acquiring innovation-driven businesses.
Investor interest in the sector remained strong, particularly in AI, enterprise technology, and digital infrastructure. Capital inflow was directed towards companies showcasing solid fundamentals and long-term growth prospects. Raja Lahiri, Partner and Technology Industry Leader at Grant Thornton Bharat, emphasized that the surge in deal volumes over five quarters signifies a more balanced technology deal market driven by strategic intent rather than a few high-profile transactions. He anticipates this trend to sustain deal activity in the upcoming quarters.
M&A activity saw a notable uptick, with 28 deals totaling $996 million, marking a 33% increase in volume quarter-on-quarter. Meanwhile, private equity and venture capital (PE/VC) activity remained robust, with 52 deals amounting to $1.5 billion. On the other hand, public market activity remained subdued, with no IPO or QIP issuances for the first time since Q2 2023. Despite the quiet capital market scenario, companies with strong fundamentals and clear earnings visibility continued to attract investor interest through private fundraising avenues.
