Merger & acquisition deals drop by 52% in value terms in August
India records 131 deals worth $4.1 bn in Aug, which was 40% lower in terms of volumes
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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
New Delhi: India recorded 131 deals valued at $4.1 billion in August, which was 40 per cent lower in terms of volumes compared with August last year and 52 per cent lower in value (partly due to non-disclosure of values in most M&A deals), a report showed on Thursday.
Mergers & Acquisitions (M&A) deals recorded 21 deals valued at $1.5 billion, while deal volumes saw significant downtrend, according to Grant Thornton Bharat's 'Dealtracker Report August 2022.'
"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. 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," explained Shanthi Vijetha, Partner-Growth at Grant Thornton Bharat.
There was an absence of large ticket transactions in August and the deal activity was dominated by the early-stage companies, where the ticket sizes were low, she added. In July, the deal volumes had witnessed a 23 per cent decline and the values more than doubled due to two deals that were valued at over $1 billion. In August, private equity (PE) investments recorded $2.5 billion across 110 deals - lowest 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 per cent fall over August 2021," the report showed.
The startup sector continued to drive the PE deal volumes for August 2022 with a 64 per cent share of PE volumes and investment values of $0.3 billion. The retail tech segment led the investment volumes in the start-up sector with 24 per cent deals, followed by fintech with 16 per cent sector volumes. With $33.5 million series E2 funding, Shiprocket commerce became the latest entrant in the much-coveted unicorn club.
