India’s tech deal landscape in early 2026 showed an interesting trend. A report from Grant Thornton Bharat highlighted that while the number of deals decreased, their total value increased significantly. In the first quarter, 66 deals were made, totaling $3.4 billion. This compares to 79 deals worth $1.3 billion in late 2025.
Raja Lahiri, a tech industry expert, noted that the current environment is more thoughtful and strategic. “Deal volumes are down, but values are up. This isn’t just a one-time shift; it represents a deeper change in investment strategies,” he said.
The report suggests that investment is increasingly focused on a smaller number of high-potential opportunities, especially in areas like Generative AI and unique technology. Many companies are willing to pay more for assets with strong growth potential.
Interestingly, Q1 2026 achieved the highest quarter value for tech deals since 2022, with a 43% growth compared to the previous quarter, despite an 8% decline in the number of deals. Two significant transactions contributed nearly $3 billion to this total, showing a trend toward larger investments.
Mergers and acquisitions (M&A) were the main drivers, accounting for 21 deals worth $2.6 billion. Notably, outbound deals, where Indian firms acquire foreign companies, made up nearly all of this value. An example includes Coforge’s $2.35 billion acquisition of Encora Inc, giving a big boost to overall numbers.
Lahiri pointed out that the growing difference between steady M&A volumes and rising values indicates that strategic buyers are taking charge. Companies are concentrating on building lasting value rather than swift returns.
Private equity activity, however, slowed compared to recent highs. In Q1 2026, there were 45 deals worth $848 million, down from 50 deals valued at $1.6 billion in the previous quarter. Yet, private equity firms still dominated the market, making up two-thirds of total deal activity, but with a focus on smaller investments. About 78% of these transactions were small-ticket deals.
A notable event was Neysa Networks’ $600 million fundraising, which constituted 71% of the total private equity values for the quarter, earning the company a unicorn status.
According to recent findings, early-stage innovation, especially in AI and deep tech, continues to attract interest, even as late-stage funding becomes more cautious. The report indicated a “two-speed” market where startups still secure funding while larger companies face challenges.
Technology services emerged as the largest sector for deal value, bringing in $2.6 billion through 14 M&A deals. This suggests companies are adapting to AI disruption and changing client demands mainly through acquisitions.
Meanwhile, the enterprise software and SaaS market faced a downturn, seeing minimal M&A activity. Companies are being more careful, focusing on profitability and integration issues instead of aggressive growth. Private equity also maintained stability in this sector, but investors are increasingly looking for platforms with strong customer retention and monetization paths.
Finally, there are global pressures on tech valuations. Concerns about Generative AI impacting traditional IT services have led to lower price multiples. Manish Saxena from Grant Thornton highlighted this trend, noting that valuations of Indian IT companies are currently much lower than their five-year averages, signaling a shift in how the market views traditional business models.
For further insights, you can explore the full Grant Thornton Bharat report here.
Source link
India tech deals,technology M&A,Grant Thornton,Q1 2026,IT services,GenAI deals,tech valuations,private equity,unicorn funding,technology services,enterprise SaaS,AI startups,cross-border deals,Coforge Encora,dealtracker report
