The domestic retail industry witnessed 146 deals worth USD 1.5 billion in the first quarter of 2026, including one public market transaction, indicating a recovery in volumes alongside a sharp moderation in values, a report said on Monday.
In volume terms, deals rose 21 per cent to 146 from 120, while values declined about 55 per cent to USD 1.5 billion from USD 3.4 billion, reflecting a shift towards smaller transactions in the absence of large-ticket deals, according to an analysis by Grant Thornton Bharat.
During the quarter, momentum was supported by increased outbound activity, even as investors remained focussed on disciplined deal-making, it said.
The report further highlighted that the top five Mergers and Acquisitions (M&A) and Private Equity (PE) deals accounted for 57 per cent of total deal value.
Category-wise, personal care and food processing continued to attract strong interest, driven by evolving consumer preferences around health, convenience and premium offerings, alongside ongoing portfolio sharpening by both domestic and global players.
On the M&A front, activity strengthened in volume terms during the period, with 40 deals worth USD 358 million, up 18 per cent from 34 deals in Q4 2025, while values declined 33 per cent from 532 million.
Domestic consolidation remained a key driver, with food processing, personal care and FMCG leading M&A volumes at 13, 10 and 8 deals, respectively.
In value terms, personal care led with USD 155 million, underscoring investor interest in premium and health-oriented categories.
In addition, the PE segment remained resilient with 105 deals worth USD 1.1 billion, marking a 22 per cent rise in volumes.
FMCG led PE investments in value terms at USD 347 million, followed by food processing with 8 deals worth USD 257 million.
According to the analysis, the quarter saw steady deal flow, with investors shifting towards mid-sized, growth-stage investments and smaller ticket sizes.
E-commerce and emerging consumer brands continued to attract funding, particularly in digital-first and health-focussed segments.
Naveen Malpani, Partner and Consumer Industry Leader at Grant Thornton Bharat, said the first quarter of 2026 reflects a phase of measured recovery in India’s consumer and retail sector, with deal volumes rebounding even as capital deployment remains selective.
“We are seeing a clear shift towards profitability-led growth, premiumisation and brand-led strategies, with investors focussing on resilient segments with pricing power,” he added.
However, activity across discretionary segments remained selective, as textiles and apparel saw steady volumes but lower values, while retail tech and consumer services remained subdued.
“PE continued to anchor overall activity, contributing the majority of volumes and value, with sustained interest in scalable, profitability-led businesses,” the report said.
