India’s Auto Sector Sees Lowest Quarterly Deal Volume In Three Years At $717 Million

India’s automotive sector witnessed its lowest quarterly deal volume in three years during Q2 2026, registering a total of $717 million, according to a report by the Press Trust of India based on Grant Thornton Bharat’s Automotive Dealtracker.

Despite the decline in transaction numbers, deal values remained relatively strong, with capital concentrated in select high-value transactions across technology-driven mobility platforms, electric vehicles (EVs), and public market fundraises.

The quarter saw only 20 overall deals, reflecting a 4 percent decline in total value quarter-on-quarter. Grant Thornton Bharat noted that investors are increasingly selective, prioritising companies with proven scale, differentiated capabilities, and clear growth potential.

“While deal activity slowed, investments remained focused on businesses shaping the future of mobility,” said Saket Mehra, Partner and Auto & EV Industry Leader at Grant Thornton Bharat.

Excluding public market fundraises, the sector recorded 18 M&A and PE/VC transactions valued at $479 million. Within M&A, five deals worth $138 million closed, emphasising technology-led capability building rather than scale-driven acquisitions.

The standout transaction was KPIT Technologies’ $120 million acquisition of Israel-based Cymotive Technologies, underscoring the rising strategic importance of automotive cybersecurity, connected vehicles, and software-defined mobility.

Private equity and venture capital activity accounted for 13 deals worth $341 million, reflecting a cautious approach amid a challenging funding environment.

Investors continued to channel capital toward scalable mobility solutions and the EV ecosystem, highlighted by Rapido’s $240 million fundraise—the largest deal of the quarter—followed by JBM Ecolife Mobility’s $47 million investment.

Average deal sizes increased notably, illustrating a shift toward high-value, technology-driven transactions.

The trends indicate sustained investor confidence in companies facilitating the transition to electrified, connected, and software-centric mobility solutions, despite the overall slowdown in quarterly deal volumes.

As the sector evolves, technology-led investments, particularly in EVs and mobility platforms, are expected to continue shaping deal activity, providing a strategic focus for both domestic and international investors seeking long-term growth opportunities in India’s automotive ecosystem.