Slowdown haunts India Inc as big deals disappear
Volumes fell 45% as India Inc registered 106 deals worth $4.6bn; Primary mkt witnessed only 1 IPO in May when compared to 8 public issues worth $4bn in May 2022
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New Delhi India Inc recorded 106 deals valuing $4.6 billion last month -- a 45 per cent decline in deal volumes and a steep 87 per cent decline in deal values compared to May last year, a report showed on Monday. The month of May saw only one IPO raising $390 million, compared to eight issues raising $4 billion witnessed in May last year.
Unlike May last year, which saw four multi-billion-dollar deals worth $31.5 billion, the month gone by witnessed an absence of big-ticket transactions, according to Grant Thornton Bharat’s Dealtracker May 2023 report.
Mergers and Acquisitions (M&A) deal activity experienced a significant decline, with a 45 per cent decrease in deal volumes and a notable 98 per cent decrease in values compared to May 2022, recording only 22 deals valued at $675 million. Domestic volumes reached a three-year low with 20 deals, while cross-border activity hit its lowest monthly volumes and values to date.
“We are currently seeing persistent global macro-concerns center around inflationary pressures in the US and eurozone. India is also experiencing a downturn in deal activity compared to past year,” said Shanthi Vijetha, Partner-Growth at Grant Thornton Bharat.
While there has been an overall decline in the deal activity compared to past years, both M&A and PE volumes have witnessed a gradual month-on-month increase since February.
“In addition, the government’s emphasis on regulatory reforms to enhance the ease of doing business, combined with the country’s robust fundamentals, create a strong foundation for deal-making in India,” Vijetha added.
Despite a 44 per cent decrease in investment volumes and a 45 per cent decline in values, compared to May 2022, private equity (PE) landscape recorded 84 deals raising $3.9 billion in May 2023.
M&A Deal Pipeline
l Domestic volumes at 3-yr low with 20 deals
l PE landscape recorded 84 deals raising $3.9 bn in May
l 44% decrease in PE investment volumes and a 45% decline in values
l The startup sector accounts for 55% of total PE deals
