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April 2021 sets new record by reporting the highest deal volumes in any month since 2011
Contents

While the second wave of the COVID-19 pandemic is threatening to delay the current pace of domestic economic recovery, the current level of economic activities has not suffered significantly in 2021 from the localised lockdowns. Amid this, India Inc recorded 161 deals, over twice the number of deals witnessed in April 2020 with a 50% increase in the deal values aggregating to USD 13 billion. However, the way global economies deal with new variants of the virus in the coming months is likely to pose uncertainty around deal activity with overseas investors.

Key highlights of the publication

  • India Inc recorded 161 deals, over twice the number of deals witnessed in April 2020 with a 50% increase in the deal values aggregating to USD 13 billion.
  • Compared with March 2021, April 2021 witnessed heightened deal activity both in terms of deal volumes (by 18%) and values (by 174). The surge in values was driven by increased high-value deals.
  • M&A recorded 42 transactions totaling USD 5.5 billion. While deal volumes increased by more than twice the deal volumes compared to April 2020, values fell by 30% owing to Facebook-Jio Platform deal valued at USD 5.7 billion. However, barring this deal, April 2021 recorded a 2.5-time increase in deal values.
  • Domestic deal activity accounted for 91% of overall M&A deal volumes and 76% of deal values during the month. Achieving a market leadership position appeared to be the rationale for the big-ticket domestic transactions.
  • The month witnessed record PE activity both in terms of deal values and deal volumes with 119 investments aggregating to USD 7.6 billion, the highest PE activity in any given month since 2011, underscoring the continued funding interest from global investors.
  • The month saw five start-up/ e-commerce companies join the esteem unicorn club, making a historic month for the Indian start-up ecosystem.
  • IT&ITES, e-commerce, education, manufacturing and energy and natural resources were the transaction torchbearers for the month in terms of deal values. Deal volumes were driven by transactions in the start-up, e-commerce and pharma sectors.

Outlook

The unexpected adverse impact of the second wave of the COVID-19 pandemic on the healthcare system and the domestic economy and reaction to it by the global stakeholders in the transactions ecosystem is expected to negatively impact the deal landscape in the short term. However, the short-term impact is also expected to create opportunities for more transactions going forward and will be a matter of timing.