India’s Q12022 M&A deal volumes rise 53% YoY: Grant Thornton Bharat

New Delhi : India Inc’s Q1CY22 M&A deal volumes witnessed a 53 per cent increase compared to Q1CY21, as per Grant Thornton Bharat’s Dealtracker report.

Q1CY22 saw 167 M&A deals valued at $3.9 billion, the report said. Besides, it cited that volumes jumped by more than half, and the value dropped by 46 per cent as Q1CY21 had witnessed two deals valued over billion dollars while 2022 did not.

“The drop in the values were also due to around 70 per cent of deals with undisclosed deal values. Top 10 deals accounting for 6 per cent of M&A deal volumes, constituted 60 per cent of the total M&A deal values in Q1 2022,” the report said.

“Driven by Google’s $700 million acquisition of 1.28 per cent stake in Bharti Airtel, the telecom sector accounted for 18 per cent of the M&A value, for Q1 2022.”

In terms of the private equity (PE) landscape, the investments drove deal values in Q1CY22 with 441 deals valued at $9.4 billion, the highest number of deals recorded in the opening quarter of any given year, the report said.

“This translated to a significant 92 per cent increase in the deal values and 47 per cent growth in deal volumes compared with the same period last year. The uptrend in the deal activity was on the back of 25 high-value investments valued at and over $100 million and 99 deals valued between $10-99 million, compared to only 13 and 65 such deals, respectively, witnessed in Q1 2021.

“Driven by 10 high-value investments of at and over $100 million, e-commerce sector led the investment values capturing 34 per cent of PE values during Q1CY22 garnering investments worth $3.2 billion across 60 deals. The quarter also witnessed the emergence of 11 unicorns across tech-savvy sectors compared to only two unicorns created in Q1 2021.”

On an overall basis, India Inc. recorded 608 deals worth $13.3 billion, up from 408 deals worth $12.1 billion recorded in Q1CY21. “This translates to a significant 49 per cent growth in the deal volumes and 9 per cent increase in values compared to January-March period of 2021.”

Shanthi Vijetha, Partner, Growth at Grant Thornton Bharat, said that despite headwinds from the pandemic and other uncertainties, deal makers in India are notably optimistic about the prospects for a stronger economy in the current year.

“We expect the momentum of deal activity to continue in the coming months of 2022.

“In particular, demand for new technological capabilities and underlying innovation is anticipated to grow. This is likely to drive M&A deal-making. The start-up ecosystem is expected to continue strong in 2022, fuelled by PE activity, with more new-age companies becoming unicorns.