M&As in India soar to new heights: Here are the top deals of Q2 2024 | Personal Finance

 The quarter saw a significant rise in high-value deals (over USD 100 million), with 30 transactions compared to only 19 (including three billion-dollar deals) in Q1 2024, reflecting a 58% increase.

“Indian corporates are increasingly investing domestically, reflecting strong confidence in the local investment climate. Despite declining crossborder deals due to geopolitical instability, traditional sectors grew in volumes over the previous quarter. With recent election results and anticipated policy clarity from the upcoming budget, political stability is expected to boost investor confidence and drive deal activity in the next six months,” said Grant Thornton in a report. 

Traditional sectors like pharmaceuticals and manufacturing witnessed strong deal activity in Q2 2024, collectively contributing nearly half of the total deal values.

M&A Landscape:

Domestic deals lead growth: M&A activity saw 132 deals worth $6.2 billion in Q2 2024. This indicates a slight increase in volumes but a significant 50% decline in values compared to Q1 2024. Domestic deals were the primary driver, with a 29% rise in volumes and a 2.5-fold increase in values compared to the previous quarter. Four high-value deals by the Adani Group in the industrial materials and ports sectors significantly influenced this growth, accounting for 52% of the total M&A value in Q2 2024.

Cross-Border Deals Decline: Conversely, cross-border M&A deals experienced a decline, with volumes decreasing by 24% and values plummeting by 85% compared to Q1 2024.

Deal of the quarter: Ambuja Cement’s acquisition of a 100% stake in Penna Cements worth USD 1.3 billion. This deal will increase Adani Cement’s market share by 2% across India and 8% in South India. 

Source: Grant Thornton

Where is the money going? Sector-specific niche deal flows were witnessed, particularly in EVs, industrial materials, pharma & biotech, energy & renewables, infrastructure, and defence segments. 

PE Landscape:

PE Deals surge in value and volume: PE investment witnessed significant growth in Q2 2024, recording 335 deals valued at USD 8.7 billion. This translates to a 9% increase in volume and a 55% increase in value since Q1 2024. This quarter marked the highest volumes since Q2 2022, and second highest values with 21 high-value deals (≥ USD 100 million) accounting for 68% of the total PE values.

PE transactions dominated the overall deal landscape, comprising 72% of the total deal volume and 59% of the total values. 

QIP & IPO Landscape:

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  There were 20 Qualified Institutional Placements (QIPs) totaling  $2.3 billion in Q2 2024, showcasing an increase in both values and volumes compared to the previous quarter. The volume stands as the second-highest since Q4 2017.
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  There were 14 IPOs totaling $4.2 billion, representing the highest quarterly IPO size since Q2 2022 despite a 42% decline in the number of IPOs compared to the previous quarter, indicating a trend towards fewer but larger IPOs.

Sector trends: 

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  The retail and consumer sector topped in terms of overall volumes but witnessed a marginal 7% decrease in volumes while an 18% increase in values over the previous quarter. 
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  The textiles, apparels and accessories segment led the sector contributing to 28% of the deals valuing $370 million
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  e-commerce segment led the values with 20 deals, contributing 69% of the sector’s value at $1.4 billion.
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  Followed by the retail sector, IT & ITes contributed to 16% of the overall deals for the quarter with a marginal 9% increase in volumes, while values declined over the previous quarter, resulting the drop in the average deal value from USD 10.9 million in Q1 2024 to USD 9.7 million this quarter. The tech start-ups led the sector in terms of both volumes and values with a 47% and 36% contribution, respectively.
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  The pharma, healthcare and biotech segment led the values for the quarter with $3.8 billion across 53 deals driven by ten high-value deals that contributed nearly 86% of the sector’s values.  The health tech segment led in volumes, while the medical devices space led in values with a 28% share.
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  Followed by the pharma sector, manufacturing led the values for the quarter, witnessing a 28% increase in volumes while values increasing by 9x over the previous quarter, valuing $3.5 billion. This was mainly due to three high-value deals (over USD 500 million) by the Adani group in the industrial materials segment, constituting 87% of the sector’s values. The industrial materials segment also led in volumes with 41% of the deals.
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  The professional and business services and aviation sector attracted some traction in the quarter while witnessing muted activity in Q1 2024. Agriculture, transport & logistics, real estate apart from the top sectors witnessed significant increase in the deal activity. In contrast, the infrastructure management, education, hospitality and leisure and media and entertainment sector witnessed significant decline in overall numbers in Q2 2024 over the previous quarter

First Published: Jul 08 2024 | 12:20 PM IST