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A significant 40% fall in deal volumes y-o-y, and values fell by more than half.
Delhi: India has overtaken the UK to become the fifth-largest economy in the world and its position is expected to improve in the years to come due to steady economic growth. According to Grant Thornton Bharat Dealtracker Report August 2022, the deals landscape echoed the same growth sentiment, with India Inc recording 131 deals valued at USD 4.1 billion last month. When compared with July 2022, while the deal volumes witnessed a 23% decline, the values more than doubled due to two deals that were valued at over USD 1 billion.
Commenting on the deal activity, Shanthi Vijetha, Partner- Growth at Grant Thornton Bharat said, “The Indian economy expanded at the fastest pace this year in August, supported by the RBI’s increased focus on taming inflation fuelled by consumption. August 2022 recorded 131 deals valued at USD 4.1 billion. This was 40% lower in terms of deal volumes compared with August 2021 and 52% lower in value (partly due to non-disclosure of values in most M&A deals). The downtrend in deal activity appears to be due to the cautious approach of buyers and investors in committing large capital, given the global macroeconomic scenario and capital market conditions. Hence, the absence of large ticket transactions and instead, the deal activity is dominated by the early-stage companies, where the ticket sizes are low.”
Mergers and acquisitions (M&A) landscape: M&A deals recorded 21 deals valued at USD 1.5 billion. This segment witnessed a contrasting trend during the month: while the volume saw a significant downtrend, deal values were up by 79% owing to the JSW Energy and Mytrah Energy deal (USD 1.3 billion). Barring this deal, the deal values declined by 73%. M&A deal volumes at 21 marked the second lowest monthly volumes recorded since 2011. In line with previous months, M&A activity was dominated by domestic consolidations, which constituted more than three-fourths of M&A volumes and 98% of values. With 14% of deal volumes each, the start-up and IT sectors continued to dominate the segment.
Private equity (PE) landscape: Private equity investments recorded USD 2.5 billion across 110 deals. Deal volumes at 110 was the lowest monthly number recorded since May 2021. The decline in PE funding was largely due to the absence of large investments. While August 2021 recorded 18 high-value investments, August 2022 saw only four such investments, thereby witnessing a 67% fall over August 2021. The start-up sector continued to drive the PE deal volumes for August 2022 with a 64% share of PE volumes and investment values of USD 0.3 billion. The retail tech segment led the investment volumes in the start-up sector with 24% deals, followed by fintech with 16% sector volumes. With USD 33.5 million series E2 funding, Shiprocket, an automated shipping tool for e-commerce became the latest entrant in the much-coveted unicorn club.
IPO and QIP landscape: YTD 2022 recorded 19 initial public offerings (IPO) with an issue size of USD 6.2 billion (second highest YTD values), compared to 38 IPO issues, raising USD 9.7 billion in YTD 2021. Qualified institutional placement (QIP), on the other hand, saw nine issues raising USD 933 million (lowest valued raised since YTD 2015) compared to 27 issues raising USD 5.2 billion over YTD 2021. Both IPO and QIP activities continued witnessing a fall in fund-raising via respective routes over the last year.
Press Release
The world’s 5th largest economy records 131 deals at USD 4.1 billion in August 2022
14 Sep 2022
A significant 40% fall in deal volumes y-o-y, and values fell by more than half.
Delhi: India has overtaken the UK to become the fifth-largest economy in the world and its position is expected to improve in the years to come due to steady economic growth. According to Grant Thornton Bharat Dealtracker Report August 2022, the deals landscape echoed the same growth sentiment, with India Inc recording 131 deals valued at USD 4.1 billion last month. When compared with July 2022, while the deal volumes witnessed a 23% decline, the values more than doubled due to two deals that were valued at over USD 1 billion.
Commenting on the deal activity, Shanthi Vijetha, Partner- Growth at Grant Thornton Bharat said, “The Indian economy expanded at the fastest pace this year in August, supported by the RBI’s increased focus on taming inflation fuelled by consumption. August 2022 recorded 131 deals valued at USD 4.1 billion. This was 40% lower in terms of deal volumes compared with August 2021 and 52% lower in value (partly due to non-disclosure of values in most M&A deals). The downtrend in deal activity appears to be due to the cautious approach of buyers and investors in committing large capital, given the global macroeconomic scenario and capital market conditions. Hence, the absence of large ticket transactions and instead, the deal activity is dominated by the early-stage companies, where the ticket sizes are low.”
Mergers and acquisitions (M&A) landscape: M&A deals recorded 21 deals valued at USD 1.5 billion. This segment witnessed a contrasting trend during the month: while the volume saw a significant downtrend, deal values were up by 79% owing to the JSW Energy and Mytrah Energy deal (USD 1.3 billion). Barring this deal, the deal values declined by 73%. M&A deal volumes at 21 marked the second lowest monthly volumes recorded since 2011. In line with previous months, M&A activity was dominated by domestic consolidations, which constituted more than three-fourths of M&A volumes and 98% of values. With 14% of deal volumes each, the start-up and IT sectors continued to dominate the segment.
Private equity (PE) landscape: Private equity investments recorded USD 2.5 billion across 110 deals. Deal volumes at 110 was the lowest monthly number recorded since May 2021. The decline in PE funding was largely due to the absence of large investments. While August 2021 recorded 18 high-value investments, August 2022 saw only four such investments, thereby witnessing a 67% fall over August 2021. The start-up sector continued to drive the PE deal volumes for August 2022 with a 64% share of PE volumes and investment values of USD 0.3 billion. The retail tech segment led the investment volumes in the start-up sector with 24% deals, followed by fintech with 16% sector volumes. With USD 33.5 million series E2 funding, Shiprocket, an automated shipping tool for e-commerce became the latest entrant in the much-coveted unicorn club.
IPO and QIP landscape: YTD 2022 recorded 19 initial public offerings (IPO) with an issue size of USD 6.2 billion (second highest YTD values), compared to 38 IPO issues, raising USD 9.7 billion in YTD 2021. Qualified institutional placement (QIP), on the other hand, saw nine issues raising USD 933 million (lowest valued raised since YTD 2015) compared to 27 issues raising USD 5.2 billion over YTD 2021. Both IPO and QIP activities continued witnessing a fall in fund-raising via respective routes over the last year.