How India’s M&A Growth Affects Transaction Multiples
India's Q2 2026 M&A market recorded 240 deals worth $27.9 billion — the highest quarterly deal value since Q2 2022 — with five billion-dollar outbound transactions alone driving 84% of total value. Yet this headline growth masks a more nuanced shift underneath: fewer, larger deals rather than broad-based volume growth, and a pricing environment that's becoming considerably more selective about which businesses actually earn a premium. For anyone using comparable transactions to value an Indian company, understanding this shift matters more than the topline growth number itself.
Why Deal Volume and Deal Value Are Telling Different Stories
In the quarter of 2026 there were 710 deals that were worth about $20 billion. This was a 5% rise in the number of deals compared to the previous quarter. However the total value of all the deals dropped by 57% when compared to the quarter. The reason, for this drop was that there were not large deals in the first quarter of 2026. By Q2, the pattern flipped: deal count moderated somewhat, but value more than doubled, driven overwhelmingly by a handful of large outbound acquisitions.
This divergence matters directly for anyone building a comparable transactions analysis. A valuer pulling "average deal multiples for the quarter" without separating deal size cohorts risks badly skewing the result .A quarter dominated by a few billion-dollar outbound deals produces a very different average multiple than one built on a broad base of mid-market domestic transactions, even if the headline "deal value growth" number looks similarly strong in both cases.
The Shift Toward Fewer, Bigger Bets
This isn't about one quarter. It shows a pattern that goes back, to 2026. Well-capitalized buyers are deploying capital into fewer, larger, more transformational transactions rather than spreading it across many smaller deals, a trend playing out globally but particularly visible in India's current dealmaking environment. Notably this pullback in volume looks like it is caused by valuation gaps and macroeconomic caution not by a shortage of capital. Deal value, for sponsors actually went up 25 to 30 percent even though their number of deals fell 20 to 25 percent. This shows that sponsors are still ready to pay for the asset but they are choosing better deals than they used to.
For valuation purposes, this means comparable transaction multiples drawn from smaller, mid-market deals may not be representative of what a genuinely large, strategic transaction would actually command right now — the two segments of the market are behaving quite differently.
Outbound M&A Is Reshaping Which Multiples Are Even Relevant
Indian outbound M&A has reached genuinely record levels in 2026, with Indian companies increasingly using cross-border acquisitions to secure raw materials, energy assets, technology, and downstream market access rather than just domestic scale. This has a direct implication for comparable company selection: an Indian business being valued for a potential cross-border sale increasingly needs to be benchmarked against global transaction multiples in its sector, not just domestic Indian precedents, since domestic deal comparables may simply be too thin or unrepresentative for certain sectors and deal sizes.
Where Genuine Premiums Are Showing Up
Technology deal value jumped sharply in the first half of 2026, and a clear theme has emerged within it: assets with credible AI capabilities are commanding real valuation premiums, while businesses built on more traditional models are facing considerably heightened buyer scrutiny. This mirrors the AI-driven bifurcation playing out in technology valuations more broadly, and means a comparable transactions analysis for a tech business specifically needs to account for whether recent comparable deals actually involved genuine AI capability, or simply happened to occur in a broadly defined "tech" category.
Government-backed initiatives supporting R&D-intensive businesses are also expected to act as a structural tailwind for innovation-led deal activity, likely supporting higher valuations specifically for companies that qualify for this kind of support and can demonstrate genuine technology moats.
India's M&A growth in 2026 isn't a uniform rising tide lifting every valuation multiple equally. It's concentrated in fewer, larger, often cross-border deals, with real pricing premiums emerging specifically for AI-capable and innovation-led businesses, while more traditional, smaller-scale comparables tell a considerably more subdued story. A comparable transactions analysis built today needs to segment carefully by deal size, domestic versus cross-border scope, and genuine technology differentiation — a blended, headline-level multiple risks materially mispricing a business that doesn't sit squarely in the segment actually driving this growth.
