Technology – India’s Tech Investment Momentum Continues with Strong Deal Activity in Q2 2026
Technology – India’s technology industry witnessed a significant rise in investment activity during the second quarter of 2026, reflecting sustained confidence among investors and corporate buyers. Although the overall value of transactions declined compared to the previous quarter, the number of completed deals reached its highest level in more than a year, highlighting steady momentum across the sector.
Deal Activity Reaches Highest Level in Five Quarters
According to a report released by Grant Thornton Bharat on Friday, the country’s technology sector recorded 80 transactions with a combined value of $2.5 billion during the April-June quarter of 2026. The volume of deals increased by 18 percent from the previous quarter, marking the strongest quarterly performance since the first quarter of 2025.
Despite the increase in deal count, the total value of investments fell by 35 percent on a quarter-on-quarter basis. The report attributed this decline to the absence of large overseas acquisitions that had significantly lifted transaction values during the opening quarter of 2026.
AI and Digital Capabilities Drive Corporate Acquisitions
The report highlighted that companies continued to focus on acquiring businesses with expertise in artificial intelligence, cloud computing, cybersecurity, and digital engineering. These technology segments remained central to acquisition strategies as businesses looked to strengthen their digital capabilities and prepare for future growth.
The expansion in transaction volume reflected wider participation from both mergers and acquisitions (M&A) as well as private equity investors, indicating a healthier and more diversified investment environment.
Startup Acquisitions Show Strong Recovery
A notable trend during the quarter was the sharp increase in startup acquisitions. Grant Thornton Bharat said startup-focused M&A activity reached its highest level in six quarters, suggesting that established companies are placing greater value on innovation-led businesses and emerging technologies.
The report also noted that investors continued to prioritize enterprises with sustainable business models, strong operational performance, and long-term growth prospects. Interest remained particularly strong in artificial intelligence, enterprise technology, and digital infrastructure.
Industry Outlook Remains Positive
Commenting on the findings, Raja Lahiri, Partner and Technology Industry Leader at Grant Thornton Bharat, said the latest figures demonstrate a more balanced market where transaction activity is increasingly supported by long-term strategic objectives instead of relying on a handful of exceptionally large deals.
He added that this disciplined investment approach is expected to encourage stable deal-making in the coming quarters, providing continued support to the growth of India’s technology ecosystem.
M&A and Private Equity Maintain Healthy Momentum
Merger and acquisition activity strengthened during the quarter, with 28 deals valued at approximately $996 million. This represented a 33 percent increase in deal volume compared with the previous quarter.
Private equity and venture capital investments also remained active, accounting for 52 transactions worth around $1.5 billion. The steady participation of financial investors reflected continued confidence in India’s expanding technology landscape despite changing market conditions.
Public Market Remains Quiet
While private investment activity remained encouraging, the public fundraising environment was relatively subdued. The second quarter of 2026 became the first quarter since Q2 2023 without any Initial Public Offering (IPO) or Qualified Institutional Placement (QIP) in the technology sector, indicating that companies continued to prefer private capital over public market fundraising during the period.