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Tepid start for India Inc in 2023, overall deal activity down 41%

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India Inc witnessed a significant decline in deal volumes and values in January, recording 145 deals, valuing $2.7 billion, with overall deal activity down by 41 per cent, a report showed.

The merger and acquisition (M&A) deal volumes declined by 62 per cent, at 26 deals valuing $311 million, owing to the volatile market conditions and the cautious approach adopted by strategic investors, according to the report by Grant Thornton Bharat.

Private equity (PE) investments recorded 119 deals valued over $2.4 billion, while startups continued to drive volumes, accounting for 66 per cent of deals.

There was an overall decline in deal activity owing to a significant drop in the M&A deal space.

“The past year has been a rocky road for the deal activity, with economies witnessing continued shutdowns, salary freezes and layoffs, leaving investors uncertain about their portfolios and future investments,” said Shanthi Vijetha, Partner – Growth at Grant Thornton Bharat.

Although the deal momentum in January did not match expectations and witnessed a declining trend, “domestic deal activity is expected to remain at the forefront of M&A activity and PE/VC funds are expected to direct their capital into the attractive Indian market, throughout the year,” Vijetha added.

While PE activity declined, the month gone by still witnessed five big-ticket investments together worth $1.6 billion.

Driven by two big-ticket transactions in the pharmaceutical segment, the pharma, healthcare and biotech sector topped the value chart with 38 per cent of deal values.

Advent International acquiring a 50.1 per cent stake in Suven Pharma for $770 million was the largest PE deal of the month gone by.

The initial public offering (IPO) and qualified institutional placement (QIP) activity has been declining consistently since 2022.

The month of January recorded only one IPO, Sah Polymers Limited IPO worth $8 million, whereas QIPs showed muted activity, the report mentioned.

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Tepid start for India Inc in 2023, overall deal activity down 41%

India Inc witnessed a significant decline in deal volumes and values in January, recording 145 deals, valuing $2.7 billion, with overall deal activity down by 41 per cent, a report showed.

The merger and acquisition (M&A) deal volumes declined by 62 per cent, at 26 deals valuing $311 million, owing to the volatile market conditions and the cautious approach adopted by strategic investors, according to the report by Grant Thornton Bharat.

Private equity (PE) investments recorded 119 deals valued over $2.4 billion, while startups continued to drive volumes, accounting for 66 per cent of deals.

There was an overall decline in deal activity owing to a significant drop in the M&A deal space.

“The past year has been a rocky road for the deal activity, with economies witnessing continued shutdowns, salary freezes and layoffs, leaving investors uncertain about their portfolios and future investments,” said Shanthi Vijetha, Partner – Growth at Grant Thornton Bharat.

Although the deal momentum in January did not match expectations and witnessed a declining trend, “domestic deal activity is expected to remain at the forefront of M&A activity and PE/VC funds are expected to direct their capital into the attractive Indian market, throughout the year,” Vijetha added.

While PE activity declined, the month gone by still witnessed five big-ticket investments together worth $1.6 billion.

Driven by two big-ticket transactions in the pharmaceutical segment, the pharma, healthcare and biotech sector topped the value chart with 38 per cent of deal values.

Advent International acquiring a 50.1 per cent stake in Suven Pharma for $770 million was the largest PE deal of the month gone by.

The initial public offering (IPO) and qualified institutional placement (QIP) activity has been declining consistently since 2022.

The month of January recorded only one IPO, Sah Polymers Limited IPO worth $8 million, whereas QIPs showed muted activity, the report mentioned.

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