Synopsis

India's automotive sector recorded its lowest quarterly deal volumes in three years. Deal values remained strong despite falling transaction volumes in the second quarter. Investment focused on businesses driving the future of mobility and electrification. Mergers and acquisitions prioritized technology-led capability building over scale. Capital continued flowing towards scalable mobility platforms and EV ecosystem players.

New Delhi: India's automotive sector recorded its lowest quarterly deals transaction volumes in three years at a total of USD 717 million in Q2 2026, according to Grant Thornton Bharat's latest Automotive Dealtracker.

In Q2 2026 deal values remained largely strong despite transaction volumes falling to their lowest quarterly level since Q2 2023, Grant Thornton Bharat said in a statement.

India's automotive sector recorded 20 overall deals worth USD 717 million in Q2 2026, it added. Overall deal values declined marginally by 4 per cent quarter-on-quarter, as capital remained concentrated in a few high-value transactions across mobility platforms, automotive technology and public market fundraises, it added.

"While deal activity slowed during the quarter, investment remained focused on businesses driving the future of mobility," Grant Thornton Bharat Partner and Auto & EV Industry Leader, Saket Mehra said.

He further said ,"We are seeing continued interest in EVs, mobility platforms and automotive technologies, with investors becoming more selective and backing companies that have demonstrated scale, differentiated capabilities and a clear growth path."

As the sector evolves, technology-led investments are expected to continue shaping deal activity, Mehra noted.

Grant Thornton Bharat said excluding public market activity, the automobiles sector recorded 18 M&As (mergers and acquisitions) and PE/VC (private equity/venture capital) transactions worth USD 479 million, with investors continuing to back technology-led mobility businesses, electrification and EV ecosystem enablers amid a more selective investment environment.

During the quarter M&A activity remained selective with five deals worth USD 138 million, as investors prioritised technology-led capability building over scale-driven acquisitions, it added.

The quarter was led by KPIT Technologies' USD 120 million acquisition of Israel-based Cymotive Technologies, showing the growing strategic importance of automotive cybersecurity, software-defined vehicles and connected mobility, it added.

Despite lower deal volumes, average deal size increased significantly, reflecting a focus on high-value, technology-driven transactions, Grant Thornton Bharat said.

PE/VC activity moderated during the quarter, recording 13 deals worth USD 341 million, with investors remaining selective amid a challenging funding environment, it stated.

Capital continued to flow towards scalable mobility platforms and EV ecosystem players, led by Rapido's USD 240 million fundraise, the largest deal of the quarter, followed by JBM Ecolife Mobility's USD 47 million investment.

The trend highlights sustained investor confidence in businesses driving the next phase of mobility and electrification, Grant Thornton Bharat said. PTI