India's Pharma and Healthcare Deal Activity Rises 23% in Q3 2026

India’s pharmaceutical and healthcare industries experienced a notable increase in transaction volume during the third quarter of 2026, according to a recent report by Grant Thornton Bharat. Between July and September, the sectors recorded 87 deals valued at $4.3 billion, marking a 23 percent rise in the number of transactions compared to the 65 deals completed in the second quarter of the year.

Despite this growth in deal count, the total value of transactions fell sharply by 69 percent from $13.9 billion in Q2 2026. This substantial decline in deal value is primarily due to the absence of a massive $11.75 billion deal between Sun Pharma and Organon that took place in the previous quarter. Excluding this outlier, the sectors maintained strong activity levels, reflecting ongoing interest from investors and companies in the pharmaceutical and healthcare fields.

The $4.3 billion worth of deals in Q3 were largely driven by private transactions. Private equity investments and mergers and acquisitions accounted for about $2.3 billion spread across 81 of the 87 deals recorded during the quarter. While mergers and acquisitions grew modestly by 6 percent in terms of volume compared to Q2, private equity investments surged significantly, with a 69 percent increase in deal numbers.

Public market fundraising also saw positive momentum in this period. Four initial public offerings (IPOs) raised $1.27 billion, while two qualified institutional placements (QIPs) generated an additional $162 million. These public offerings indicate confidence in the sector’s long-term growth potential among institutional and retail investors alike.

The report highlights a market environment characterized by a wide range of transactions but concentrated capital allocation, where a limited number of large deals continue to dominate the financial landscape. Reflecting this trend, the average deal size dropped to $13.5 million in Q3 from around $42 million in Q2, excluding the one-time Sun Pharma-Organon transaction. This shift suggests a preference for smaller, more focused acquisitions aimed at specific capabilities or market niches.

In the pharmaceutical and biotechnology segments, there were 11 mergers and acquisitions during the quarter. These deals centered on acquiring established brands, intellectual property rights, active pharmaceutical ingredients (APIs), sterile manufacturing facilities, and biologics capabilities. One of the largest M&A transactions was Novartis India’s acquisition of Pfizer’s Minipress trademarks and related intellectual property for $132 million, marking a key strategic move within the sector.

The diagnostics industry also witnessed consolidation with six deals in Q3, doubling the activity from three deals in the previous quarter. This increase reflects efforts by major players to expand their laboratory and imaging service networks, further integrating diagnostic capabilities with broader healthcare offerings.

Deal activity remained strong in emerging areas such as healthtech, wellness, and pharmaceutical services. Investors showed a clear preference for early- to mid-stage companies, signaling interest in innovation and growth potential in these sub-sectors.

Bhanu Prakash Kalmath S J, partner and healthcare industry leader at Grant Thornton Bharat, noted that evolving healthcare needs are driving demand for companies that combine scale with specialized expertise. Such businesses are expected to play a critical role in shaping the future of India’s pharmaceutical and healthcare industries.

Overall, the third quarter performance reflects a dynamic market with increasing transaction volumes and diversified deal types. The sector’s ability to attract both private and public funding underlines its importance within India’s broader economic framework and its potential for continued expansion amid changing healthcare demands.