How India’s M&A Growth Affects Transaction Multiples

India's M&A market is showing strong deal value growth in 2026, but the headline numbers do not tell the whole story.

In Q2 2026, India recorded 240 M&A deals worth $27.9 billion, making it the strongest quarterly deal value since Q2 2022. Five billion-dollar outbound transactions alone accounted for around 84% of the total deal value.

The bigger story, however, is the shift toward fewer, larger transactions. For businesses being valued using comparable transactions, this change is important because a headline market multiple may not accurately represent what similar businesses are actually commanding.

Deal Volume vs. Deal Value: Why the Difference Matters

India's M&A market has seen a noticeable gap between the number of transactions and their total value. Earlier in 2026, deal activity was relatively broad-based, with a higher number of transactions but lower overall value. By Q2, the trend shifted toward larger transactions, causing total deal value to rise sharply even as deal volumes moderated.

For valuation professionals, this distinction matters.

Using an average transaction multiple from a quarter dominated by a few very large deals can produce misleading results, particularly when valuing a small or mid-sized company. Large strategic transactions often involve different growth expectations, synergies, geographic considerations, and buyer profiles than smaller domestic deals.

A comparable transactions analysis should therefore separate deals by size, sector, geography, and strategic characteristics rather than relying on a single market average.

Why Fewer, Larger Deals Are Emerging

The current M&A environment suggests that buyers are becoming more selective about where they deploy capital.

Well-capitalized investors and strategic buyers appear increasingly willing to pursue large, high-quality assets while remaining cautious about smaller or less differentiated businesses. This does not necessarily indicate a lack of available capital. Instead, it reflects greater attention to valuations, business quality, growth visibility, and potential returns. This creates a more segmented valuation environment.

A high-quality business with strong cash flows, competitive advantages, or strategic relevance may still attract significant buyer interest, while businesses with weaker fundamentals may face greater valuation pressure.

For comparable transactions, this means the quality of the underlying transaction matters as much as the multiple itself.

Outbound M&A Is Changing Comparable Transactions

Indian companies are increasingly looking outside the domestic market for acquisitions involving technology, energy, raw materials, manufacturing capabilities, and access to international markets. This growth in outbound M&A has an important implication for valuation.

If an Indian company is being valued for a potential cross-border transaction, domestic Indian precedents may not always provide the most relevant benchmark. Global transactions in the same industry may offer better insight into the multiples strategic buyers are willing to pay.

However, international comparables should also be adjusted for differences in market conditions, company size, growth, profitability, and transaction structure.

Where Are Valuation Premiums Emerging?

The technology sector is one area where the valuation landscape is becoming increasingly differentiated. Businesses with credible AI capabilities, proprietary technology, strong intellectual property, or clear technology-driven competitive advantages may attract greater buyer interest than traditional businesses operating under the same broad industry classification.

This creates an important issue when selecting comparable transactions.

A technology company should not automatically be benchmarked against every recent "technology" transaction. A deal involving an AI-enabled platform may command a very different valuation from one involving a conventional software or IT-services business.

The key is to identify whether the comparable transaction reflects the same value drivers as the company being valued.

What This Means for Comparable Transactions Valuation

The 2026 M&A environment highlights why transaction comparables need to be carefully segmented. A robust comparable transactions analysis should consider deal size, domestic versus cross-border transactions, industry segment, business model, growth profile, profitability, and strategic rationale.

For example, a large outbound acquisition by a strategic buyer may include significant expected synergies that are not available to a financial investor acquiring a smaller domestic company. Using the transaction multiple without considering these differences can lead to an overstated valuation.

Similarly, a technology transaction involving a strong AI capability may not be an appropriate benchmark for a traditional technology services business.

What Businesses Are More Likely to Attract Premium Valuations?

The current market suggests that buyers are increasingly rewarding businesses with characteristics that provide clearer visibility into future value. Companies with sustainable growth, strong cash generation, differentiated technology, strategic assets, strong customer relationships, and credible expansion opportunities are more likely to attract premium valuations.

On the other hand, businesses with inconsistent performance, limited differentiation, high customer concentration, or uncertain growth prospects may face greater scrutiny even when overall M&A activity is strong.

This is why market growth does not automatically mean higher valuation multiples for every business.

Conclusion

India's 2026 M&A market is growing, but the growth is not evenly distributed.The market is increasingly being driven by fewer and larger transactions, significant outbound acquisitions, and selective premiums for businesses with strong technology and strategic value.

For anyone performing a comparable transactions valuation, relying on a single headline market multiple can therefore be misleading. The better approach is to understand which transactions are driving the market, why buyers are paying those prices, and how closely those deals actually resemble the company being valued.

In today's M&A environment, the right comparable is not simply the most recent transaction. It is the transaction that reflects the same business characteristics, risk, growth potential, and strategic value.