India’s automotive and electric vehicle (EV) sector saw a steady but cautious start to 2026, with deal activity remaining selective despite improving investor confidence. According to Grant Thornton Bharat’s latest deal tracker report, the industry recorded 35 deals worth USD 745 million in the January-March quarter, largely in line with the 34 deals seen in Q4 2025. However, the total deal value declined to USD 837 million in the previous quarter due to the absence of large cross-border and scaled-up transactions.There was no activity in the public markets during the quarter, including IPOs or QIPs, indicating a more measured investment approach. A sharp decline in outbound deal values (from USD 4,064 million in Q3 2025 to USD 10 million in Q1 2026) also points to a normalization phase, even as investments in power and mobility-focused platforms continued.
Merger and acquisition (M&A) activity was muted with just seven deals worth US$43 million. This led to a 22 percent decline in volume and a steep 91 percent decline in value compared to the previous quarter. Most of the deals were small, merit-driven acquisitions, mostly domestic in nature.Private equity (PE), however, emerged as a key driver of deal activity. There were 28 PE deals worth USD 702 million in the quarter, up 12 percent in volume and 86 percent in value over Q4 2025. Investments were heavily focused on EVs, with 11 deals valued at approximately US$448 million, followed by 11 deals valued at approximately US$448 million with an app of 210 million. Meanwhile, traditional automotive segments remain relatively quiet as the industry continues its transition to electrification.
