Corporate India's merger and acquisition activity in February fell 26 per cent in value terms over the year-ago month to $1.3 billion owing to declining domestic activity, says a survey.

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According to assurance, tax and advisory firm Grant Thornton, there were 32 merger and acquisition (M&A) deals in February worth $1,354 million, a 26 per cent fall in deal value and 11 per cent decline in the transaction volume over February 2016.

The report said that the fall in M&A activity was primarily on account of a significant drop in domestic deal activity.

There were just 16 domestic M&A deals in February worth $593 million, while in February 2016 there were 22 such transactions worth $1.28 billion.

"The overall activity in February has been slightly slow perhaps because of the much awaited Union Budget announcement earlier in the month," Grant Thornton India LLP Partner Prashant Mehra said.

Mehra further noted that "with the government's proposal to abolish FIPB along with the global uncertainties, India will perhaps see a further surge in inbound investments which should peak in the last quarter of 2017.

"With domestic growth back on track post-demonetisation, coupled with visibility on critical reforms like GST, domestic M&A in core sectors will continue to grow in value and volume," he added.

Sector-wise, the manufacturing segment led the deals by contributing over 29 per cent of total value. This was primarily driven by Havells Ltd's acquisition of consumer durable business of

Lloyd Electric and Engineering and the Lloyd brand for a consideration of $235 million.

In terms of number of transactions, start-ups and IT and ITeS sector collectively captured 50 per cent of volumes, the report said.

February also witnessed some big ticket deals valued over $100 million in sectors like telecom, energy and pharma, it added.