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Only 100 deals valued at $5 billion were registered in April 2023, a 47 per cent and an 89 per cent drop in deal volume and value compared to April 2022, according to the Grant Thornton Bharat Dealtracker Report.
The main factor noted was the mega-merger of HDFC Bank and HDFC Ltd worth $40 billion witnessed in April 2022. However, barring this deal, April 2023 will still record a 24 per cent decline in deal values.
“Global macroeconomic factors, turmoil in the banking sector in the US and Eurozone, and a fall in the price of commodities, specifically crude oil, continue to dampen deal activity. However, domestic M&A deal-making continues to be resilient. We may also expect to see an uptick in PE activity in the coming months on the back of start-ups’ focus on profitability, resulting in investors turning bullish on select pockets of the Indian market,” said Shanthi Vijetha, Partner, Growth, Grant Thornton Bharat.
Mergers and Acquisitions
M&A deal activity saw a significant downtrend both in terms of deal volumes by 53 per cent and deal values, with only 24 deals valued at $477 million as compared to 51 deals valued at $42.9 billion in April 2022. According to the report, the decline in values was mainly due to the absence of big-ticket investments in addition to one of the biggest mergers, HDFC and HDFC Bank, worth $40 billion, witnessed in April 2022.
Furthermore, while domestic activity dominated M&A activity, cross-border activity witnessed the lowest April deal volumes and values since 2011. The deal of the month was Ipca’s 33 per cent acquisition of Unichem for $126 million, while the top five deals for the month accounted for 81 per cent of overall M&A deal values, valuing USD 387 million. Of these, $218 million came from the pharma, healthcare, and biotech sectors, followed by deals in the energy sector.
Private equity
PE activity saw 76 deals valued at $4.5 billion. The funding crisis continued to cause a 45 per cent decline in investment volumes. While the start-up sector continued to drive the volumes, drawing investors’ attention towards innovation and tech.
The report noted that traditional sectors like pharma, energy, and banking garnered large cheques driving the investment values for the month. Driven by Temasek’s $2 billion investment in Manipal Health Enterprise, the largest deal in the Indian healthcare industry, the pharma, healthcare, and biotech sectors dominated the PE deal values. This deal alone accounted for 45 per cent of the PE deal values for the month.
TheIPO landscape shows thatyear-to-date (YTD), 2023 recorded 6 initial public offerings (IPOs) with an issue size of $58.9 billion, compared to 9 IPO issues, raising $2 billion in YTD 2022.
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