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Indian dealmaking activity reached unprecedented levels in the second quarter of 2024, recording 501 deals valued at $21.4 billion, according to Grant Thornton Bharat Dealtracker. This surge marks the highest quarterly volume since Q2 2022.
M&A and PE Deals: An Overview
Record Volume, Declining Values: The combined M&A and PE deals totaled 467, valued at $14.9 billion. While the volume of deals increased by 9%, the total value saw a 28% decrease, primarily due to the absence of large mergers like the $8.5 billion Reliance-Disney deal from the previous quarter.
High-Value Transactions on the Rise: The quarter featured one billion-dollar deal and 30 high-value transactions (over $100 million), reflecting a 58% increase in high-value deals compared to Q1 2024.
M&A Landscape
Domestic Deals Lead the Growth: M&A activity comprised 132 deals worth $6.2 billion, with domestic deals driving growth. Domestic deal volumes rose by 29%, and values increased 2.5 times compared to Q1 2024. Four significant deals by the Adani Group in the industrial materials and ports sectors contributed to 52% of the total M&A value.
Cross-Border Deals Decline: Conversely, cross-border M&A deals saw a decline, with volumes decreasing by 24% and values plummeting by 85% compared to Q1 2024.
Deal of the Quarter: The highlight was Ambuja Cement’s $1.3 billion acquisition of Penna Cements, increasing Adani Cement’s market share by 2% across India and 8% in South India.
Private Equity Landscape
Surge in PE Investment: Private equity investments experienced significant growth, with 335 deals totaling $8.7 billion. This marks a 9% increase in volume and a 55% rise in value from Q1 2024, making it the highest volume since Q2 2022 and the second-highest in value.
Dominance in Overall Dealmaking: PE transactions dominated the deal landscape, accounting for 72% of the total deal volume and 59% of the total values. High-value deals (≥ $100 million) made up 68% of the total PE values.
Sectoral Performance
Traditional Sectors Thrive: Pharmaceuticals and manufacturing sectors saw robust activity, contributing nearly half of the total deal values. The IT & ITes sector recorded a 9% increase in volumes, though it faced a decline in average deal value, with tech start-ups leading in both volumes and values.
Mixed Results Across Sectors: Retail and consumer segments posted an 18% increase in values despite a 7% decrease in volumes. The manufacturing sector saw a 28% increase in volumes and a ninefold increase in values, driven by high-value deals in industrial materials.
Other sectors like professional services and aviation also gained traction, while infrastructure, education, hospitality, leisure, and media sectors experienced declines.
Future Outlook
Political Stability to Boost Confidence: Grant Thornton Bharat highlighted that the recent election results and anticipated policy clarity from the upcoming budget are expected to enhance investor confidence and drive deal activity in the next six months.
Despite geopolitical challenges affecting cross-border deals, the local investment climate remains strong, reflecting a growing confidence among Indian corporates.
Shanthi Vijetha, Partner, Growth at Grant Thornton Bharat, emphasized the robust private equity activity and significant domestic deals, noting the positive impact of the government’s third term on policy continuity and the deal environment.
