India Inc sees sharpest drop in deal value: report

India Inc saw the sharpest drop in deal value due to the lack of major investment last month, with 171 mergers and acquisitions (M&A) and private equity (PE) deals worth $2 billion, a new report finds.



At $280 million for 32 deals in July, the mergers and acquisitions witnessed a significant downward trend both in terms of deal volumes, up 14 percent, and deal value down 95 percent, according to Grant Thornton Bharat Deal tracker report.

Cross-border transactions recorded the second lowest both in terms of deal volumes and in terms of value over the past 12 months due to global tensions.

With 28 percent each of M&A deal volumes, the start-up and IT sectors continued to dominate deal activity with nine deals each having a cumulative value of $162 million.

“Like many countries, Asia’s third-largest economy is also experiencing rising inflation, exacerbated by rising commodity prices. A weaker rupee has further pushed up imported inflation,” said Shanthi Vijetha, Partner, Growth, Grant Thornton Bharat .

Nevertheless, start-up, e-commerce and IT led transaction volumes for the month, while “infra, pharma, retail and banking sectors topped the total value”.

“The month saw the birth of only one UnicornOneCard, in the fintech segment,” she said.

While M&A transaction volumes increased compared to June, which saw the lowest monthly volumes in the past 19 months, deal values ​​declined due to a lack of high-quality transactions and the non-disclosure of values ​​in the majority of offerings.

The PE landscape saw 139 deals worth $1.7 billion.

While PE transactions still accounted for more than 80 percent of total deal activity, deal values ​​declined significantly.

“The start-up sector continued to drive PE deal volumes for July 2022 with a 70 percent share of the volumes, with an investment value of $0.6 billion,” the report said.

The retail tech segment led investment volumes in the start-up sector with deals at 20 percent, followed by enterprise applications and infrastructure and fintech at 18 percent each.

The year-to-date (YTD) 2022 registered 17 initial public offerings (IPO) with an issue size of $6 billion, compared to 28 IPO problems, raising $7 billion in YTD 2021, the report says.

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