At $2.2 billion, M&A deal value falls by 37%, volume by 40% in November

November turned out to be the worst month for the deal street with 119 merger and acquisition transactions worth $2.2 billion, a fall of 40 per cent in volume and 37 per cent in value annually

November turned out to be the worst month for the deal street with 119 merger and acquisition transactions worth USD 2.2 billion, a fall of 40 per cent in volume and 37 per cent in value annually, a report said on Monday.

This is in spite of the month seeing the highest number of IPOs (initial public offerings) in the year, and the fourth highest in the past 11 years, according to the data collated by Grant Thornton.

With 21 per cent of M&A (Merger and Acquisitions) volumes, the startup sector continued to dominate the M&A deal activity, said the report, while PE (private equity) activity saw USD 1.4 billion worth of investments made across 100 deals (second-lowest monthly volumes), down 55 per cent in volume and 32 per cent in value.

With just USD 2.2 billion across 119 deals, November was the worst month so far this year. This is a 40 per cent plunge in volume and a 37 per cent in value over November 2021.

However, the month also saw the highest number of IPOs in the year, making it the fourth-highest in the past 11 years, Shanthi Vijetha, a partner at the agency, said.

The muted deal activity shows a significant drop in both M&As and PE deals as strategic and financial investors are taking a cautious and conservative approach given the prevailing global uncertainties, he said.

From an M&As perspective, both in the terms of volume as well as value, deals declined with only 19 transactions worth USD 818 million, marking the second-lowest monthly volumes till date. While volume declined 62 per cent, value plunged 88 per cent over November 2021.

The startup sector continued to drive the PE deals with a 55 per cent of volume worth USD 246 million, led by retail tech segment (22 per cent share), followed by fintech and enterprise application and infrastructure at 16 per cent and 13 per cent, respectively.

The energy and natural resources sector led the chart in value terms for the month led by the Serentica Renewables fund raising.

The markets are down so far this year both from the IPOs as well as QIPs fronts with 32 IPOs worth USD7.6 billion as compared to 53 IPOs worth USD 15.4 billion in 2021. On the other hand, qualified institutional placement (QIP) saw 13 issues raising USD 1 billion so far compared to 34 issues that raised USD 6.1 billion in 2021.