Thought Leadership

Monthly Dealtracker - March 2021

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M&A recovery that began in the second half of 2020 will accelerate in 2021
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Key highlights from the publication
  • Strategic M&A deals accounted for just under 50% of the total deal value at USD 1.47 billion

  • Cross-border deal activity yet to match the pre-covid levels with only 22% of M&A deal values for the month

  • 107 private equity investments, significant 41% increase in activity level, worth about USD1.53 billion

  • Consumer-centric sectors like start-up, retail and e-commerce pushed the PE deal activity during the month while IT, pharma and media sectors attracted big cheques from investors

  • The start-up sector led with 87 deals as demand soars for digitalisation and automation

Continuing a positive deal trend, February saw record monthly volumes since July 2015. At an aggregate level, deal values amounted at USD 3 billion across around 150 transactions, which is a 13% increase in terms of volumes as compared with February 2020 while values dropped by 43% compared with February 2020.

Deal summary – February Volume Value (USD million)
Year 2020 2021 2020 2021
Domestic 21 32 1,210 1,137
Cross-border 15 11 2,337 329
Inbound 7 7 1,990 279
Outbound 8 4 347 50
Mergers and internal
restructuring
2 - 10 -
Total M&A 38 43 3,557 1,466
PE 76 107 1,776 1,532
Grand Total 114 119 5,333 2,998

Outlook

Even as the GDP forecasts for 2021 improve to over 8%, policy implementation and the mapping out of announcements made in the Union Budget will be key for economic recovery. The M&A recovery that began in the second half of 2020 will accelerate in 2021, as corporate and private investors have access to capital and can pursue deals to build scale and expand the scope. Distress-fueled divestments in the energy, telecom and manufacturing sectors will also rise as several companies are compelled to restructure and divest their stressed and non-core assets to deleverage their balance sheets.