According to the Consumer and Retail Dealtracker by Grant Thornton Bharat, Q3 2023 was characterised by substantial deal values due to few high-ticket transactions in the retail and e-commerce sectors. India's business landscape witnessed remarkable developments, with a surge in mergers and acquisitions (M&A) and private equity (PE) activities. Q3 2023 saw 68 deals amounting to USD 4.15 billion, indicating an 182% increase in deal values from Q2 2023. The values also witnessed an exponential 491% from Q3 2022.
Naveen Malpani, Partner and Consumer Industry Leader, Grant Thornton Bharat, said, “We see businesses adopt a more prudent approach, prioritising profitability over cash expenditure, especially in digital growth segment. Global brands continue to focus on the Indian market and are tying up with large manufacturers. These collaborations reflect the increasing faith of global investors. As the festive season approaches, the upcoming quarter is anticipated to yield promising results for the industry."
Mergers and Acquisitions (M&A) landscape: Q3 2023 saw a significant increase in M&A deal values, totaling USD 2.3 billion, primarily driven by three large deals, led by Walmart's investment in Flipkart for USD 1.4 billion. Notably, the textile, apparel, and accessories sub-sector experienced a substantial increase in traction, primarily attributed to the Titan-Caratlane transaction. Despite muted deal volume trends, key factors driving M&A transactions include process transformation, technological innovation, and supply chain efficiency.
Private Equity (PE) landscape: Q3 2023 recorded the lowest number of PE deals by volume in the last seven quarters, with 52 deals. However, the USD 1.26 billion investment in Reliance Retail Ventures Limited, led by Qatar Investment Authority and KKR, was a significant driver in terms of deal value. The Textile, Apparel, and Accessories sub-sector witnessed the most value traction due to the Reliance transaction. E-commerce also experienced a notable deal volume and value decline during the quarter. With an improved economic outlook, better liquidity, and narrower valuation gaps, Q4 2023 and Q1 2024 are anticipated to witness increased traction in the PE deals space.
India presents a robust and stable macroeconomic outlook, with healthy consumption trends and steady growth in various sectors. The country remains a land of opportunity for businesses willing to adapt to the evolving environment. As we look ahead, the business landscape in India appears poised for further growth and prosperity in the quarters to come.
The press release was issued on 17 October 2023.