Mumbai, July 16 -- Grant Thornton Bharat said India's automotive sector recorded 20 deals worth $717 million (mn) in the second quarter of 2026, underscoring continued interest in the industry. Excluding public market activity, the sector logged 18 mergers and acquisitions and private equity and venture capital (PE/VC) transactions worth $479 mn, with investors continuing to back technology?led mobility businesses, electrification and electric vehicle ecosystem enablers amid a more selective investment environment.

During the quarter M&A activity remained selective, with five deals worth $138 mn as investors prioritised technology?led capability building over scale?driven acquisitions. The quarter was led by KPIT Technologies' $120 mn acquisition of Israel?based Cymotive Technologies, indicating the growing strategic importance of automotive cybersecurity, software?defined vehicles and connected mobility.

Despite lower deal volumes, average deal size increased significantly, reflecting a focus on high?value, technology?driven transactions, the firm said. PE/VC activity moderated, recording 13 deals worth $341 mn as funding conditions grew more challenging, yet capital continued to flow towards scalable mobility platforms and EV ecosystem players.

Rapido's $240 mn fundraise was the largest transaction in the quarter, followed by JBM Ecolife Mobility's $47 mn investment, illustrating investor appetite for platform and electrification plays. The pattern points to sustained investor confidence in businesses that enable the next phase of mobility and electrification even as deal selection becomes more rigorous.

The report said the shift towards larger, tech?centric transactions reflects a maturing sector as businesses invest in software, cybersecurity and electrification capabilities to meet changing consumer and regulatory demands. Investors favoured companies offering scalable technology platforms, digital mobility solutions and components for electric vehicle supply chains, reinforcing long?term growth prospects despite near?term funding pressures. Selective capital allocation may continue as backers seek clear pathways to monetisation and operational resilience.

Published by HT Digital Content Services with permission from Construction World.