Delhi: According to Grant Thornton Bharat’s Dealtracker October 2022 report, the month recorded 129 deals, valued at USD 2.1 billion. This, being the lowest monthly volume witnessed in 2022, translated to 42% fall in volumes and a significant 77% decline in values as compared to October 2021. When compared to September 2022, the deal volumes witnessed an 11% decline while values decreased by 49%, due to the absence of big-ticket transactions.
Shanthi Vijetha, Partner- Growth at Grant Thornton Bharat, commented on the deal activity, saying, “In view of inflation, with ongoing improvement in domestic economic activity supported by private consumption growth and expected support from festive season demand, Indian domestic demand showed a relatively healthy growth trend. Owing to this, macroeconomic strength continues to manifest in the form of improving high-frequency consumption and industrial indicators. Considering this, we expect domestic deal activity to continue, if not grow, in the coming months.”
Mergers and acquisitions (M&A) landscape: The M&A space recorded 33 deals at USD 692 million, witnessing a significant downtrend both in terms of deal volumes, by 47%, and deal values by 79%. Deal activity was dominated by domestic consolidations, which constituted 82% of M&A volumes and 84% of values. Cross-border did not show any significant improvement both in terms of deal volumes and values, owing to global tensions. The start-up sector led the volumes with 27% of the deals driven by the enterprise application segment followed by auto tech and edtech segments. The Education and IT sectors tailed behind the start-up sector with 12%, recording four deals each, dominated by the online education and software development segments, respectively. Driven by only one deal for the month, with Torrent Pharma’s USD 250 million acquisition of Curatio Healthcare, pharma sector topped the value chart with 36% of the total deal values.
Private equity (PE) landscape: Private equity investments recorded USD 1,448 million across 96 deals. The PE investment trend witnessed a drop, both in terms of deal values and volumes, over October 2021. The decline was largely due to recovering markets showing instability and hence investors being skeptical and conservative. With 64% of total PE deal volumes, start-up sector continued to top the deal chart. Retail tech witnessed heightened activity followed by health tech, fintech and enterprise application segments together contributing to 67% of start-up sector volumes. Agriculture and forestry dominated the values driven by USD 500 million fund raise by agriculture solutions provider, UPL Limited.
YTD comparison: YTD 2022 witnessed a marginal increase in deal volumes while values saw a 51% increase amounting to USD 116 billion. While YTD M&A volumes were on par, values witnessed a significant increase owing to marquee transactions sealed this year. PE investment, on the other hand, saw 23% fall in investment values.
IPO and QIP landscape: YTD 2022 recorded 23 initial public offerings (IPO) with an issue size of USD 8.8 billion, compared to 43 IPO issues, raising USD 23.5 billion in YTD 2021. Qualified institutional placement (QIP), on the other hand, saw 12 issues raising USD 1.1 billion compared to 31 issues raising USD 5.4 billion over YTD 2021. Both IPO and QIP activity continue witnessing a fall amidst the volatile markets and company postponing their IPO plans to avoid discounted listing prices.