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According to the Grant Thornton Bharat Dealtracker, Q2 2024, Indian dealmaking witnessed an overall 501 deals, valued at USD 21.4 billion. Q2 2024 witnessed highest quarterly volumes since Q2 2022, while values declined due to absence of big-ticket M&A transactions. M&A and PE deals together stood at 467, valued, totaling USD 14.9 billion, reflecting a 9% increase in volumes but a 28% decrease in values, primarily due to the previous quarter's USD 8.5 billion Reliance-Disney mega-merger. The quarter featured one-billion-dollar deal and 30 high-value deals (over USD 100 million), marking a 58% increase in high-value deals compared to the previous quarter, which had only 19 high-value deals including three billion-dollar deals. Indian corporates are increasingly investing domestically, reflecting strong confidence in the local investment climate. Despite declining cross-border deals due to geopolitical instability, traditional sectors grew in volumes over the previous quarter. With recent election results and anticipated policy clarity from the upcoming budget, political stability is expected to boost investor confidence and drive deal activity in the next six months.
Shanthi Vijetha, Partner, Growth, Grant Thornton Bharat, commented, “The quarter witnessed robust private equity activity and large domestic deals. Despite a decline in cross-border deals due to geopolitical uncertainties, domestic investment remained strong. Traditional sectors like pharma and manufacturing also saw strong deal flows, collectively contributing nearly half of the deal values. With the government entering third term after the recent elections, the industry anticipates policy continuity, which should positively drive the deal activity.”
Mergers & Acquisitions (M&A) landscape: M&A activity in Q2 2024 saw 132 deals worth USD 6.2 billion, marking a slight increase in volumes but a substantial 50% drop in values. Domestic deals drove this growth, with volumes rising by 29% and values increasing 2.5 times compared to Q1 2024. This surge was largely due to four high-value deals by the Adani group in the industrial materials and ports sectors, which accounted for 52% of the total M&A values for the quarter. In contrast, cross-border deals experienced a decline, with volumes decreasing by 24% and values plummeting by 85% from Q1 2024.
Private Equity (PE) Landscape: In Q2 2024, the private equity (PE) landscape saw significant growth, recording 335 deals totaling USD 8.7 billion, marking a 9% increase in volume and a notable 55% increase in value since Q1 2024. This quarter marked the highest volumes since Q2 2022, and second highest values with 21 high-value deals (≥ USD 100 million) accounting for 68% of the total PE values. PE transactions dominated the overall deal landscape, comprising 72% of the total deal volume and 59% of the total values. Despite small-ticket transactions (under USD 7 million) dominating deal volumes with a 53% share, they contributed only 4% to the total values, underscoring the concentration of value in larger deals within the PE sector during the quarter.
QIP & IPO Landscape: There were 20 QIPs totaling USD 2.3 billion, showing an increase in both values and volumes over the previous quarter, with volumes marking the second highest since Q4 2017. As for IPOs, there were 14 IPOs totaling USD 4.2 billion, representing the highest quarterly IPO size since Q2 2022 despite a 42% decline in the number of IPOs compared to the previous quarter, indicating a trend towards fewer but larger IPOs.
Retail and consumer sector emerged as a dominant force in deal activity despite a 7% decrease in volumes, showcasing an 18% increase in values over Q1 2024. The IT & ITes sector experienced a 9% increase in volumes but faced a decline in average deal value, with tech start-ups leading both volumes (47%) and values (36%). Meanwhile, the pharma, healthcare, and biotech sector achieved USD 3.8 billion in values, largely influenced by high-value deals and substantial PE investments accounting for 68% of volumes and 65% of values. The manufacturing sector saw a notable 28% increase in volumes and a dramatic 9x increase in values, driven by high-value deals in industrial materials led by the Adani group. Other sectors like professional services and aviation gained traction, while agriculture, transport, logistics, and real estate sectors surged. However, sectors such as infrastructure, education, hospitality, leisure, and media witnessed declines in overall deal numbers during Q2 2024.