India’s consumer sector records USD 981 Million in deals in Q2 2026 despite slower activity: Grant Thornton Bharat

India's consumer sector recorded 97 deals worth USD 981 million in Q2 2026, with overall deal volumes declining 34% quarter on quarter and deal values moderating 33%, according to Grant Thornton Bharat's latest Consumer Dealtracker. The slowdown reflected a more selective investment environment, although strategic acquisitions and growth-stage investments continued across high-conviction consumer themes. Excluding IPOs and QIPs, the sector recorded 95 M&A and PE/VC transactions worth USD 918 million, with deal values remaining above Q2 2025 levels, highlighting continued investor confidence in India's long-term consumption story.

Commenting on the findings, Naveen Malpani, Partner and Consumer Industry Leader, Grant Thornton Bharat, said, “We are seeing a structural shift in India's consumer sector, with capital increasingly flowing towards specialised, high-growth categories rather than traditional consumption themes. Businesses operating in wellness, premium personal care, nutrition and digital-first consumer brands are attracting disproportionate investor interest as changing consumer preferences create new growth opportunities. Companies are also using acquisitions more strategically to expand into adjacent categories and strengthen their portfolios. We expect these emerging consumer themes to continue shaping investment and deal activity in the sector."

M&A activity moderated during the quarter, recording 20 deals worth USD 184 million, with both volumes and values declining by nearly half compared to the previous quarter due to the absence of large strategic acquisitions. Domestic transactions continued to anchor activity, accounting for 65% of deal volumes and 58% of deal value, while inbound M&A strengthened significantly, with deal volumes doubling and values rising nearly fivefold, reflecting sustained international interest in India's consumer market. Strategic acquisitions remained focused on strengthening market presence, expanding product portfolios and enhancing distribution capabilities. The top M&A deal of the quarter was Emami Ltd's acquisition of a 60% stake in IncNut Digital Pvt Ltd (Vedix and Skinkraft) for USD 34 million, highlighting continued strategic interest in premium digital-first personal care brands.

PE/VC activity remained the primary driver of consumer dealmaking, with 75 deals worth USD 734 million, contributing nearly 80% of both total deal volumes and values. While funding activity moderated quarter on quarter, investment values remained above Q2 2025 levels, indicating sustained investor conviction in consumer businesses. Investors continued to back scalable companies with strong unit economics and sustainable growth, reflecting a more disciplined approach to capital deployment. The top PE transaction of the quarter was Advent International's USD 150 million investment in Iscon Balaji Foods Ltd, reflecting sustained investor confidence in India's branded food processing sector.

Public market activity remained subdued during the quarter, with one IPO raising USD 47 million and one QIP raising USD 16 million. While IPO proceeds increased modestly over the previous quarter, fundraising through public markets remained below recent highs, reflecting continued caution in capital markets.

Sectoral highlights:

• Retail Tech led M&A activity with nine deals worth USD 89 million, driven by continued investments in ONDC-enabled platforms, B2B commerce ecosystems and retailer-enablement solutions.
• Personal Care recorded four deals worth USD 52 million, reflecting sustained strategic interest in premium, direct-to-consumer and innovation-led brands.
• FMCG, Textiles & Apparel and E-commerce together accounted for 44% of PE/VC deal volumes, signalling continued investor preference for resilient consumption themes.
• Textiles & Apparel (USD 178 million), Food Processing (USD 172 million) and FMCG (USD 145 million) attracted the highest PE/VC investment values during the quarter.

Capital continued to be concentrated in high-conviction opportunities, with the top five M&A deals contributing 64% of M&A value and the top five PE/VC investments accounting for 54% of total PE/VC value, reflecting a disciplined investment environment.