The first quarter of 2024 witnessed a significant number of merger and acquisition (M&A) deals in the Indian corporate landscape, according to a report published by Grant Thornton Bharat’s Q1 Technology Dealtracker. A total of 67 deals, valued at $648 million, were recorded. This development comes despite a funding slowdown and economic uncertainty.
The technology sector particularly flourished, experiencing a 25% increase in deal values compared to the previous quarter. This growth is attributed to five high-value deals exceeding million each, constituting a significant portion (59%) of the total deal activity.
This optimism is further bolstered by the emergence of two new unicorns in India’s tech sector: Krutium AI and Perfios Software. Unicorns are privately held startups valued at over billion.
The report highlights two successful initial public offerings (IPOs) in the tech sector during Q1 2024, raising a combined total of $110 million. Additionally, three qualified institutional placements (QIPs) were conducted, securing a total of $219 million.
The substantial rise in investment activity during Q1 2024, despite global economic challenges, demonstrates investor confidence in the long-term potential of Indian tech companies.
Despite the challenges, India’s tech startup ecosystem secured the fourth-highest funding globally. This achievement underscores the robustness of India’s tech landscape, which grew 3.8% in FY2024.
Both M&A and PE activity witnessed increased deal activity over the last two quarters. There were 19 M&A deals in the quarter, totaling $215 million. Q1 2024 saw a significant 46% increase in deal volumes and a whopping 497% rise in deal values compared to the previous quarter. The average deal size increased from $2.8 million to $11.3 million.
Domestic consolidations accounted for 47% of deal volumes, while outbound transactions significantly contributed to the M&A deal values at 82%. U.S. companies played a leading role in outbound activities1.
The technology sector tracked 48 deals amounting to $433 million. Private Equity (PE) investments were dominant, leading 72% of the total transaction volumes and contributing to 67% of the total sector values.
The surge in Q1 deal flow, boasting an 18% volume and 25% value increase, signifies a bounce-back with M&A at the forefront. The strategic bets on AI and digital innovations position India to seize emerging prospects, steering towards a dynamic FY25.
With information from Economic Times
