ArticlePost-Budget Article: Impact on the Automotive Sector
The forward-looking approach adopted in the budget towards this sector has been in alignment with the government’s goals of promoting Aatmanirbhar Bharat and moving firmly towards net-zero carbon emissions by 2070, shares Saket Mehra in this insightful article in Financial Express.
Grant Thornton Bharat presents the 18th annual edition of the Dealtracker, our pioneering publication on the mergers and acquisitions (M&A) and private equity (PE) deals in India. This edition provides deal insights for 2022.
Key highlights of the publication
India Inc. remained active, witnessing 2,007 M&A and PE deals worth USD 127 billion, although this is a 6% decrease in the deal volumes over 2021.
The year witnessed 11 multi-billion-dollar deals amounting to USD 82.5 billion and 97 deals valued between USD 100 million and USD 999 million, amounting to USD 26.2 billion.
While domestic consolidation dominated the M&A deal space, recording 355 deals valued at USD 70.7 billion, outbound M&A activity saw record deal values to date amounting to USD 17.9 billion across 61 deals.
The deal making in 2022 was led by the start-up, e-commerce and IT sectors which constituted 74% of the deal volumes.
The M&A activity in India touched a record of USD 91.4 billion, driven by seven multi-billion-dollar deals. These high value deals constituted 84% of M&A values.
Start-ups and IT sector led the volumes accounting for 44% of total volumes, while the BFSI and IT sectors topped the charts with the HDFC and HDFC Bank merger (USD 40 billion) and the L&T and Mindtree merger (USD 17.7 billion).
Deal activity in the energy sector was seen in the renewable segment driving deal values up to USD 4.2 billion. While 2022 witnessed a drop in deal values and volumes for the education sector by 88% and 18%, respectively, the transport and logistics sector saw an increase of 141% in deal values led by ArcelorMittal Nippon Steel's acquisition of Essar Group's port assets with an 80% increase in volumes.
PE/VC segment recorded 1,530 deals worth USD 35.4 billion. While this accounted for 76% of overall deal volumes, absence of big-ticket investment led to a 26% decline in funding values.
Despite being the leading sector in volumes and values, the start-up sector saw a downtrend in 2022 compared to 2021 owing to the absence of big-ticket transactions due to the conservative approach opted by the investors amidst the global uncertainty.
The e-commerce and IT sector followed in terms of volumes, and these three sectors accounted for 80% of total deals this year. On the values front, start-ups, e-commerce, banking and financial services dominated and accounted for 48% of value, amounting to USD 17.1 billion.
Agriculture volumes more than doubled, with nearly a three-fold increase in values over the last year driven by investment in the agricultural services segment. The sector saw three transactions above USD 100 million.
The automotive sector saw significant growth in volumes from six deals in 2021 to 24 deals in 2022 worth USD 427 million, with professional services seeing a 56% increase in volumes and a 23% increase in values.