Indian dealmaking activity soared to unprecedented levels in the second quarter of 2024, according to the latest data from Grant Thornton Bharat Dealtracker. The period saw a record-breaking 501 deals, collectively valued at US$ 21.4 billion, marking the highest quarterly deal activity since the second quarter of 2022. This significant surge underscores the growing dynamism and resilience of the Indian economy amidst global uncertainties.

Mergers & Acquisitions (M&A) and Private Equity (PE) Deals

The combined tally of Mergers & Acquisitions (M&A) and Private Equity (PE) deals amounted to 467, valued at US$ 14.9 billion. Although this represents a 9% increase in the number of deals compared to the previous quarter, the total value saw a 28% decline. This drop in value is attributed to the absence of mega-mergers like the notable Reliance-Disney deal that dominated the first quarter of 2024.

High-Value Deals: One of the most striking aspects of Q2 2024 was the remarkable rise in high-value deals (over US$ 100 million). The quarter witnessed 30 such transactions, a significant jump from the 19 recorded in the first quarter of 2024. This trend indicates a robust appetite for substantial investments and strategic consolidations within key sectors.

Sectoral Highlights: Traditional sectors such as pharmaceuticals and manufacturing played pivotal roles in driving deal activity, contributing nearly half of the total deal values. This highlights the continued strength and investment potential within these industries.

M&A Performance and Trends

M&A activity saw a notable boost, with 132 deals worth US$ 6.2 billion. Domestic M&A Deals: Domestic transactions led the growth, reflecting a 29% rise in volumes and a 2.5-fold increase in values. This surge demonstrates a growing confidence in the Indian market and a strategic focus on internal consolidation and growth.

Cross-Border M&A: In contrast, cross-border M&A deals faced a decline. The volume of these deals dropped by 24%, while their values plummeted by 85%. This decline suggests a cautious approach from international investors, possibly due to global economic uncertainties and geopolitical tensions.

Quarter Highlight: The standout deal of the quarter was Ambuja Cement’s acquisition of Penna Cements for US$ 1.3 billion. This strategic move not only expanded Ambuja Cement’s footprint but also boosted Adani Cement’s market share by 2% in India and 8% in South India, highlighting the ongoing consolidation trend in the cement industry.

Private Equity Investments

Private Equity (PE) investment in India also showed significant growth in the second quarter of 2024. The quarter recorded 335 deals valued at US$ 8.7 billion, marking a 9% increase in volume and an impressive 55% increase in value compared to the first quarter of 2024. This quarter's performance represents the highest volume since the second quarter of 2022 and the second highest in terms of values.

High-Value PE Deals: The rise in high-value PE deals was particularly notable. The quarter saw 21 transactions valued at over US$ 100 million, accounting for 68% of the total PE values. This trend indicates a strategic shift among investors towards companies with established and proven business models, reflecting a preference for stability and long-term growth potential.

Dominance in Deal Landscape: PE transactions dominated the deal landscape, comprising 72% of the total deal volume and 59% of the total deal values. While small-ticket transactions (under US$ 7 million) accounted for 53% of the deal volumes, they contributed only 4% to the total deal values, highlighting the substantial impact of larger deals on the overall investment climate.

Notable Investments: Some of the most significant investments in Q2 2024 included:

Zepto: US$ 665 million

Lenskart: US$ 200 million

Apollo Health and Meesho: US$ 275 million each

These investments underscore the growing interest in diverse sectors, from e-commerce and health tech to consumer goods, reflecting the broad-based nature of the current investment boom.

Qualified Institutional Placements (QIP) and Initial Public Offerings (IPO)

The landscape for Qualified Institutional Placements (QIP) and Initial Public Offerings (IPO) also saw substantial activity in Q2 2024. The quarter recorded 20 QIPs totaling US$ 2.3 billion and 14 IPOs amounting to US$ 4.2 billion. Despite a 42% decline in the number of IPOs compared to the previous quarter, the total values remained robust, indicating a trend towards fewer but larger IPOs. This trend reflects a strategic focus on quality over quantity, with companies seeking to attract substantial investment through high-profile public offerings.

Conclusion

The second quarter of 2024 has marked a significant period of growth and transformation for Indian dealmaking activity. With a record number of deals and substantial investment values, the market has demonstrated resilience and dynamism. The surge in high-value deals, strong performance in traditional sectors, and growing interest in private equity investments all point to a robust and evolving investment landscape. As the year progresses, these trends are likely to continue, fostering further growth and innovation in the Indian economy.