India's pharma and healthcare sector recorded 65 deals worth $13.9 billion in the second quarter of calendar year 2026, with deal activity moderating to a four-quarter low as transaction volumes declined 17% quarter on quarter, according to Grant Thornton Bharat's latest Pharma and Healthcare Dealtracker.Despite lower activity, overall deal values remained resilient, led by Sun Pharmaceutical Industries $11.8 billion acquisition of Organon, the largest overseas acquisition by an Indian pharmaceutical company. Excluding this transaction, overall deal values still increased 12% over the previous quarter, reflecting healthy underlying investment activity and continued strategic interest across the sector.“The quarter reflects a clear strategic shift in India's pharma and healthcare sector. Indian companies are increasingly pursuing acquisitions that strengthen specialty portfolios, expand global market access and build differentiated capabilities rather than scale alone,” said Bhanu Prakash Kalmath S J, Partner and Healthcare Industry Leader, Grant Thornton Bharat.“At the same time, investor interest remains firmly focused on innovation-led healthcare businesses across areas such as AI-enabled care, genomics, oncology and advanced diagnostics,” he added.“As healthcare delivery and life sciences continue to evolve, we expect strategic acquisitions and targeted investments to remain the key drivers of deal activity,” he said.M&A activity strengthened during the quarter, recording 35 deals worth $13.2 billion, with transaction volumes increasing 17% quarter on quarter to their highest level in the last four quarters and values reaching an all-time high. Outbound transactions accounted for 96% of total M&A value, highlighting the growing global ambitions of Indian pharmaceutical companies as they expand specialty portfolios, strengthen innovation capabilities and increase their presence in regulated international markets. Inbound activity also revived with four transactions, while domestic deals continued to account for the majority of M&A volumes.PE/VC activity moderated during the quarter, with 26 deals worth $444 million, as deal volumes declined 42% while values remained broadly stable, according to the report.Nearly 89% of disclosed PE transactions were below $50 million, reflecting continued investor preference for smaller, targeted growth investments. Despite fewer transactions, average deal size increased, with investor interest remaining focused on biotechnology, precision medicine, preventive health, wellness and innovation-led healthcare businesses.Public market activity remained steady, with two IPOs raising $58 million and two QIPs raising $161 million, according to the report. While fundraising values declined from the previous quarter due to the absence of larger issuances, capital raising was led by Krishna Institute of Medical Sciences' $156 million QIP and Sai Parenteral's $44 million IPO, demonstrating continued investor interest in established healthcare and pharmaceutical businesses.