Deal values in India plunge to $66 billion in 2023, investors cautious, reports Grant Thornton

There was a significant drop in deal values in India for the year 2023, reaching $66 billion, marking a decrease of over 50 percent, a recent report from consultancy firm Grant Thornton Bharat found. Released on January 19, the report found a decline of over 20 percent in deal volume, with 1,641 deals compared to the previous year.

Shanthi Vijetha, a partner at Grant Thornton Bharat, pointed out several factors contributing to this. The lack of liquidity in international markets, volatile market conditions, and cautious investor sentiment were identified as key hindrances to deal activities throughout 2023.

"While India's focus on sustainability and environmental responsibility positions it as an attractive hub for global economic opportunities, overcoming challenges such as currency strength and global instability is crucial," added Vijetha.

Merger and Acquisition Impact

The report indicates a significant impact on merger and acquisition (M&A) deal values, which plummeted by 72 percent to $25.2 billion across 494 transactions. Outbound M&As were particularly affected, dropping to $3.2 billion from $17.9 billion in the previous year.

The sluggish M&A trend in the first half of 2023 recorded deal values of only $7.8 billion. The largest transaction during this period was Suraksha Group's $2.5 billion acquisition of Jaypee in the real estate sector.

Private Equity and IPO Trends

On the private equity (PE) front, 2023 witnessed a 23 percent decline in both deal volume and value, with 1,045 deals amounting to $27.4 billion. The most significant deal in this category was Temasek Holdings' $2 billion investment in Manipal Health Enterprises.

While 57 companies went public in 2023, raising $6.2 billion, Initial Public Offerings (IPOs) values saw a nearly one-fourth decrease compared to the year-ago period.

However, Qualified Institutional Placements (QIP) showed improvement, with 45 companies raising $7 billion, a substantial increase from $1.5 billion raised by 14 companies in 2022.

(With inputs from PTI)