Deal-making in India hits new high: M&A and PE lead the way, telecom tops

India's deal-making landscape witnessed a significant uptick in the third quarter of 2024, with a total of 551 deals valued at $19 billion. This marks the highest quarterly deal volume since the first quarter of 2022, reflecting increased investor confidence and a robust economic environment, according to a report by consulting firm Grant Thornton Bharat.
 

Key Highlights:

Record M&A Activity: M&A activity reached an all-time high in terms of deal volumes, recording 214 deals in a single quarter. Three companies were on an acquisition streak this quarter, i.e., Nazara Technologies with nine acquisitions worth $223 million and Aditya Birla Group and Lodha Group with five acquisitions each. Cross-border outbound deals marked a ten-year

 

high in terms of deal volumes, with 35 deals worth $5.3 billion.

• Mergers and acquisitions (M&A) contributed significantly to the surge, with a 57% increase in volume and 65% in value compared to the previous quarter.
• Cross-border activity reached a 10-year high, with 35 outbound deals worth $5.3 billion, led by Bharti Enterprises' $4 billion acquisition of a 25% stake in a British telecom group, also emerging as the deal of the quarter. 
• Domestic activity also saw a remarkable 54% volume increase and 24% value increase, achieving an all-time high in quarterly volumes. 
• However, inbound deal values declined sharply by 69%, while outbound values surged five-fold. 

PE Investment Boom: PE activity recorded the highest deal volumes since Q3 2022, while the lowest quarterly values this year. The retail and consumer sector continued to dominate PE activity, while banking and financial services and energy and natural resources contributed to the quarter’s values. Additionally, there was a notable increase in late-stage funding (Series B to Series G) in terms of both volumes and values compared to the previous quarter.

" High-value transactions were dominated by banking and financial services, energy and natural resources, and retail and consumer sectors, which captured 56% of the total PE investment market. Key deals included Brookfield Global Transition Fund's investment in Leap Green Energy, CVC Capital Partners’ investment in Aavas Financiers, and the combined backing of Zepto by General Catalyst, Dragon Fund, Epig Capital, StepStone, Lightspeed, DST and Contrary," said Vishal Agarwal, Partner and Private Equity Group & Deals Tax Advisory Leader at Grant Thornton Bharat.

• The PE landscape saw 337 deals valued at $7.6 billion, marking the highest deal volumes since Q3 2022. This was largely driven by rising demand from e-commerce and government initiatives.
• High-Value Deals: Despite a 15% decline in deal values compared to Q2 2024, the quarter witnessed significant activity in high-value deals, with 23 transactions exceeding $100 million.
• Early-Stage Funding: Seed, pre-seed, and angel stages secured $273 million across 80 deals.
• Top Deal: Brookfield Global Transition Fund I's $ 550 million investment in Leap Green Energy Pvt. Ltd. was the largest deal of the quarter.

IPO & QIP Landscape: There was a notable surge in IPO activity while QIP deals saw an all-time high.

The third quarter of 2024 witnessed the highest volumes and the second-highest values in 2024. The top-performing IPOs span across various sectors, including retail and consumer, manufacturing, finance, automotive, and technology, indicating broad-based market interest. 

The quarter saw 25 IPO listings valued at $4.1 billion, marking the highest volumes and second-highest values in the last year, indicating a healthy investment climate. Top-performing IPOs spanned various sectors, including retail, manufacturing, finance, auto, and technology, demonstrating broadbased market interest and robust economic growth. 

Additionally, QIP activity reached unprecedented levels with 42 deals worth $6.5 billion, reflecting strong institutional investor confidence.

Manufacturing and Energy & Natural Resources sectors led QIP volumes and values, respectively, with the latter's $ 2.4 billion across six deals highlighting a focus on sustainable energy projects and efficient resource management.

Sectoral Trends:

1. The telecom sector led in deal values with $4 billion from just two deals, driven by Bharti Enterprises' $4 billion acquisition of a 25% stake in a British telecom group.

2. Retail sector led deal volumes with 112 deals worth  $1.8 billion, representing a 19% increase in volumes and a 9% decrease in values over Q2 2024.

3. IT & ITes sector witnessed the second-highest quarterly deal volumes with 79 deals valuing $758 million, driven by tech start-ups.

4. Banking & Financial Services sector maintained consistent deal volumes with 64 deals and contributed $3.2 billion to deal values driven by three high value deals (> 300 mn) worth nearly

$1.5 billion.

5. Energy & Natural Resources sector saw substantial deal activity with 28 deals totaling $1.4 billion, reflecting a 65% increase in volumes and a 21-fold increase in values over Q2 2024.

6. Media & Entertainment sector remained robust with 37 deals totaling $440 million, representing a 76% increase in volumes and a 1.6x increase in values.

7. Notable deals included Bharti Enterprises' $4 billion acquisition, Mankind Pharma’s $1.6 billion acquisition of Bharat Serums, Leap Green Energy’s USD 550 million fund raise, Zepto's

USD340 million fund raise.

8. Rapido’s $120 million fund raise, Ather energy’s $71 million fund raise and Moneyview's $4.6 million funding round mark their entry into the unicorn club.

9. Education, Infrastructure, Professional/Business Services, Hospitality & Leisure sectors saw increased activity, while Manufacturing and Real Estate sectors declined in vales due to lack of big-ticket deals.

10. The top sectors by deal value were Telecom (USD 4 billion), Banking & Financial Services (USD3.2 billion), and Pharma (USD 2.2 billion).

11. The top sectors by deal volume were Retail (112 deals), IT & ITes (79 deals), and Banking & Financial Services (64 deals).