After hitting a three-year low in 2023 in value terms, India-involvement announced M&A activity made a strong comeback in January-March 2024, surging 31 per cent to $18.96 billion ($14.50 billion), latest data from LSEG Deals Intelligence showed.

However, the number of M&A deals for the quarter under review declined 26 per cent at 607 (823).  The latest deal value of $18.96 billion was substantially lower than record deal value of $ 33.71 billion seen in January-March 2022.

Meanwhile, deal value in January-March 2024 was led by media & entertainment ($3.8 billion), followed by industrials ($3.3 billion) and telecommunications.

In contrast to the previous year, where only a single deal exceeding $1 billion was announced in January-March 2023, the first quarter of calendar 2024 witnessed the announcement of three such deals, said Elaine Tan, Senior Manager at LSEG Deals Intelligence,

Notable among these were the $3-billion merger between Walt Disney and Reliance Industries Ltd’s Indian media assets, as well as the $2.5-billion merger between Data Infrastructure Trust and ATC India, she added.

“Aside from the uptick in deal activity in Q1 (Jan-Mar) 2024, several factors could potentially sustain India’s M&A momentum for the remainder of the year, particularly post-elections,” Tan said.

These factors include improved boardroom confidence propelled by a thriving Indian equity market, potential interest rate cuts, and diminishing inflationary pressures, she said.

Additionally, domestic consolidations, acquisitions aligned with sustainability themes, enhancing technical capabilities and deployment of private equity dry powder are expected to bolster dealmaking in India, according to Tan.

Target India M&A

Target India M&A activity in Jan-Mar 2024 reached $18.1 billion, up 48.5 per cent from a year ago, data showed.

Domestic M&A activity in January-March 2024 totalled $8.3 billion, a 6.5 per cent increase from the same period in 2023. 

Inbound M&A also grew 122.3 per cent from a year ago and totalled $9.8 billion. Outbound M&A activity witnessed a slow start and reached $570.3 million, down 73.5 per cent year-on-year, the lowest first quarter total since 2015. 

The US was the most active nation doing cross-border deals with India – both as target for outbound and acquiror for inbound activity.

General elections

With India going into a seven-phase general elections starting April 19, economy watchers and some analysts expect  deal making activity to get tempered down in the ongoing election season. Another widely talked about reason for potential slowdown in M&A activity could be the US elections slated for November this year. However, LSEG Deal Intelligence expects the current M&A deal momentum involving India to be sustained post elections and during the remaining part of the calendar year.

M&A activity involving India fell to a three-year low in 2023 at $83.8 billion, down 50.6 per cent from a year ago. In 2022, the total M&A activity stood at $169.70 billion and $123.14 billion in 2021. 

In 2023, India-involvement M&A witnessed a record number of deals with more than 2,600 transactions announced. This was the busiest annual period by number of announced deals involving India since records began in 1980according to the data.

PE activity slumps

Private equity-backed M&A in India in January-March 2024 amounted to $1.2 billion, down 64.9 per cent from a year ago, and the lowest first quarter total since 2014.