Leading consultancy EY said the total value of such M&As declined even as the deal volume was similar to that seen in 2014.
"The Indian M&A activity softened in 2015 with a total of 930 deals that were announced with a cumulative disclosed deal value of $26.3 billion.
Also Read
"While the deal volume remained at levels similar to the previous year (870 deals in 2014), the disclosed deal value declined by 11% from $29.4 billion in 2014," EY said in a report today.
The slump in domestic deal activity was largely due to the absence of mega deals, unlike in 2014 when there were large transactions such as $3.2 billion Sun Pharma-Ranbaxy and $2.4 billion Kotak-ING deals.
"The weakness in global markets, owing to a weak outlook and downturn in the commodity cycle, adversely affected the domestic deal activity.
"At the same time, 2015 lacked big-ticket divestments by debt-ridden companies, which were a significant contributor to the domestic deal value in 2014," the report noted.
Last year, cross-border deals accounted for 59% of the total value.
On the other hand, EY said as many as 767 transactions worth $19.6 billion investments were reported in the private equity space last year.
For PE deals, this was a significant jump compared to 469 transactions worth $11.7 billion seen in 2014.
"This heightened activity was driven by significant interest in the e-commerce sector, an increase in transaction size and a marked rise in early-stage activity," it noted.
Meanwhile, EY noted that M&A activities are expected to "turn the corner" this year as ongoing consolidation in e-commerce, retail and pharmaceuticals sectors are likely to gain further traction.
Besides, the expected comeback of de-leveraging divestments, in sectors such as power, cement and real estate, should push domestic deal activity back to 2014 levels, it added.
Amit Khandelwal, Partner and National Leader (Transaction Advisory Services) at EY said that despite uncertainties created by the global political and economic environment and a soft commodities market, India's positive outlook on the growth front will drive momentum for M&A activity through this year.