The July-September quarter of this year saw heightened activity in the merger and acquisition space, while private equity deal activity was the lowest since the third quarter of 2013, says a report.
According to News Corp VCCEdge, the September quarter witnessed 232 M&A deals worth USD 24,673 million, an increase of 242 per cent as compared to USD 7,206 million in the year ago period.
However, private equity investments dipped significantly by 63 per cent to USD 2.3 billion in the said quarter as compared to USD 6.3 billion a year ago.
"Trends suggest that median deal values have dropped by more than 70 per cent over the last 5 years with average deal sizes remaining under USD 13.87 million," Nita Kapoor, Head - India New Ventures, News Corp and CEO, News Corp VCCircle said.
She further said raising capital was "difficult" this year and the amount raised was also small as investors started writing smaller cheques.
"While domestic M&A and IPOs making a stellar comeback are the silver lining this quarter, investor money will continue to back those enterprises that are strong on revenue models and create discernible impact on the consumers they serve," Kapoor said.
In the M&A space, deal value picked up for domestic M&As from USD 1.5 billion to more than USD 20 billion, while outbound deal value slipped by 58 per cent during the quarter.
The top 3 domestic M&A deals recorded in the September quarter were HDFC Standard Life's purchase of Max Life Insurance for USD 9,730 million, the Reliance Communication -Aircel merger deal of USD 7,300 million and Nirma buying into the cement business of Lafarge India for USD 1,400 million.
In the private equity sector, India witnessed 945 deals worth USD 8.8 billion in the period under review, as against 1,245 deals worth USD 16.7 billion a year ago.
A sectoral analysis shows that information technology with 156 deals worth USD 603 million, consumer discretionary with 44 deals worth USD 456 million, financials with USD 642 million from 14 deals and healthcare with USD 180 million from 17 deals were the top sectors that attracted investor interest during the quarter.
The report noted that IPOs increased by 182 per cent to USD 2.9 billion in value from January to September 2016 while QIPs lost flavour declining 91 per cent from USD 2.6 billion to USD 228 million this year.
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