India's automotive sector recorded 33 deals worth USD 1.7 billion in Q3 2026, compared with 20 deals worth USD 717 million in Q2, according to the Grant Thornton Bharat Auto Dealtracker.
Deal volumes rose 65% and values increased 131% quarter-on-quarter, driven by higher M&A activity, improved private capital deployment and renewed public-market fundraising.
Electrification was the main investment theme, with capital flowing into EV manufacturers, battery technologies, charging infrastructure, mobility platforms and automotive technology businesses.
M&A and PE/VC together accounted for 28 transactions worth USD 808 million, up from 18 deals worth USD 479 million in Q2. EVs accounted for 54% of total M&A and PE deal activity.
Saket Mehra, Partner and Automotive & EV Industry Leader at Grant Thornton Bharat, said, "The automotive sector is moving into a new investment cycle driven by the transformation of mobility itself. Capital is no longer concentrated only on vehicle manufacturers but is increasingly being deployed across the broader ecosystem, including batteries, charging infrastructure, automotive technology and mobility platforms. This indicates that investors are backing the infrastructure and capabilities needed to support the next phase of mobility growth in India."
M&A
India's automotive sector recorded 12 M&A transactions worth USD 389 million in Q3 2026, compared with five deals worth USD 138 million in Q2. Volumes rose 140% and values increased 182%, marking the highest quarterly M&A volume to date, according to the report.
Hero MotoCorp's cumulative USD 285 million investment in Ather Energy was the largest transaction, accounting for approximately 73% of M&A value. The investment comprised a 3% stake worth USD 185 million and a further stake worth USD 100 million.
Other major transactions included Rane (Madras)'s acquisition of a 100% stake in Hindustan Composites for USD 39 million, Magna International's stake in Magna Yuma for USD 35 million and Uber India's stake in Carrum Mobility Solutions for USD 10 million. The top five deals accounted for 95% of M&A value.
Domestic transactions represented 75% of deal volumes, with nine deals worth USD 339 million accounting for 87% of total value. Inbound deals totalled USD 45 million across two transactions, while the single outbound deal was valued at USD 5 million.
Cross-border deal values declined in the absence of marquee transactions. EVs accounted for one-third of M&A transactions and more than three-fourths of M&A value. BikeWo Green Tech also completed two separate investments in domestic EV companies.
PE/VC
Private equity and venture capital activity comprised 16 transactions worth USD 419 million in Q3 2026, compared with 13 transactions worth USD 341 million in Q2. Both deal volumes and values increased 23% quarter-on-quarter.
River Mobility's USD 120 million fundraise, Ultraviolette Automotive's USD 85 million round and Yulu's USD 63 million financing were the largest transactions, together accounting for 64% of quarterly PE/VC value.
River Mobility's round alone represented 29% of the total. Yali Capital, TDK Ventures, existing investors and angel investors participated in the Ultraviolette round, while GEF Capital Partners and undisclosed investors participated in Yulu's financing.
Other significant transactions included Mahindra Last Mile Mobility's USD 34 million fundraise and Matter Motor Works' USD 25 million round. Mahindra Last Mile Mobility became a unicorn following investments from the International Finance Corporation, National Investment and Infrastructure Fund and Lightrock.
EVs accounted for nearly 69% of PE/VC investment value, while EV-related companies represented 80% of the top PE/VC deals by value. The top five transactions contributed 78% of total PE/VC value, and Series C and D rounds accounted for 31% of funding rounds.
Investments also flowed into charging, battery-swapping and fleet-electrification businesses, including Battery Smart, Roadgrid, Leanwatts and Omega Seiki Mobility.
Public-market fundraising reached approximately USD 846 million in Q3 2026, comprising USD 428 million raised through two initial public offerings (IPOs) and USD 418 million through three qualified institutional placements (QIPs). Dhoot Transmission and Hero Motors led IPO activity, while Belrise Industries, Ather Energy and SPR Auto Technologies raised capital through QIPs.
Sectoral Highlights
Automotive technology and infrastructure recorded two deals, compared with three in the previous quarter, with investments focused on technology, battery services and charging infrastructure. Auto components and manufacturing saw an increase in deal activity, with four transactions compared with one in Q2, driven by strategic acquisitions and growth capital investments.
The report expects investment activity to remain concentrated around electrification, software-defined mobility, charging infrastructure, advanced automotive technologies and platform-led mobility businesses.
The report covers deals announced and closed as of September 27, 2026. Deals were classified by sector and funding stage based on certain assumptions.