IBEF: August 11, 2021
According to Grant Thornton Bharat's 'Dealtracker,' India Inc registered 181 agreements worth US$ 13.2 billion in July 2021.
Deal volumes have increased by 66% year-over-year, while deal values have increased by 3%. Since 2005, this is also the largest monthly volume on record.
"Companies continued to borrow economically and spend their cash reserves on transformative mergers to reposition themselves for the post-Covid-19 era, which explains the spike in deal activity. In the past, corporate India has exhibited flexibility and adaptation in the face of adversity" Mr. Shanthi Vijetha, Partner, Grant Thornton Bharat, commented.
"India's potential as a key investment destination is bolstered by government reforms and a favorable demographic profile. We anticipate that the deal trend will continue to be strong in the months ahead" Mr. Vijetha remarked.
In July 2021, 36 mergers and acquisitions totaling US$ 5.6 billion were completed. While deal volumes increased by 13%, deal values decreased by 37% compared to July 2020. This was primarily due to a lack of large-ticket purchases.
In the PE/VC investments area, there were 145 deals worth US$ 7.5 billion. The spike in equities, more liquidity, and, most significantly, increased interest across industries have hastened the record-high deals.
Businesses across the country are on the mend, which has resulted in increased lending demand and record-breaking PE agreements. The epidemic has substantially expedited online business models, resulting in massive valuation increases in 2019-20.
In July 2021, start-ups dominated both the M&A and PE segments in terms of volume, with 109 deals totaling US$ 1.6 billion. Several start-ups have announced their plans to go public with an initial public offering this month. Zomato, Paytm, Nykaa, and Ola are just a few of the prominent names that have announced their plans to go public.
Zomato had a blockbuster run, with IPO applications totaling close to Rs. 3.5 lakh crore (US$ 47.04 billion).
The key highlights of the month were Byju's US$ 500 million acquisition of ed-tech business Epic in the United States, followed by Great Learning's US$ 600 million acquisition and Flipkart's US$ 3.6 billion in fresh capital from global investors.
So far this year, there have been ten billion-dollar agreements and 81 deals of US$ 100 million or more. In 2021, these high-value deals accounted for 84% of total deal values. In 2021, there were 13 unicorns compared to seven in 2020, indicating an increase in deal values in 2021.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.