Big-ticket deals fade as investor $ dip on India Inc

Mumbai witnessed a significant drop in big-ticket deals involving India's consumer and retail sector in the September quarter, according to a Grant Thornton Bharat report. The value of such deals decreased by 58% year-on-year to $948 million, marking a 53% reduction in terms of value compared to the previous year. Notably, only two deals exceeded $100 million, down from five in the same period last year, indicating a trend of fewer large transactions.

In the first nine months of 2026, mergers and acquisitions (M&As) and private equity and venture capital (PE/VC) activity in the consumer sector saw 353 deals valued at $3.26 billion, representing a 6% decrease in volume and a substantial 53% dip in deal value from the prior year. This suggests that investors are now exercising greater caution, favoring businesses with clear propositions and clear paths to profitability over aggressive expansion.

Grant Thornton Bharat's Naveen Malpani noted that while dealmaking persisted across various consumer categories, the overall value of deals was impacted by fewer large transactions and smaller funding rounds. PE/VC investments accounted for a significant portion of the activity, representing 84 out of 113 deals worth $719 million, which is the highest contribution among deal types.

Although the number of deals increased by 11% quarter-on-quarter, the value of these investments saw a slight decline of 3%, suggesting a more measured approach to capital deployment.

A bright spot in the consumer sector was the personal care industry, where investment values surged sixfold sequentially, driven by interest in premium beauty, wellness, and direct-to-consumer brands. Additionally, sectors like jewellery, apparel, and lifestyle saw increased attention due to ongoing premiumization trends. The festive and wedding season is expected to further bolster these sectors' performance.

Public markets played a crucial role as well, with initial public offerings (IPOs) and qualified institutional placements (QIPs) contributing 51% of the overall deal value worth $1.92 billion. This surpassed the combined value of M&A and PE/VC transactions, which totaled $948 million. This surge in public market activity highlights the expanding funding options available to established consumer businesses.

However, the future outlook for consumer sector investment seems uncertain, as challenges such as weather-related disruptions and potential impacts of El Nino on agricultural output and rural incomes could weigh on consumption in certain sectors, according to Malpani. He emphasized that building lasting consumer relationships and sustaining growth will be crucial for creating long-term value amidst evolving demand patterns.