India Inc observed 221 deals worth $9.2 billion in October, an 11% rise in comparison to the past month and double compared to the year-ago period, according to the Grant Thornton Bharat Dealtracker published on Monday. The number of mergers and acquisition (M&A) activities in October 2021 reached 61, in comparison to 25 deals in October 2020, recording the highest monthly deal volume since September 2015.
October 2021’s total M&A deal value reached $3.3 billion over 61 deals, which is a multi-fold boost in deal volumes and values compared with the deal activity in October 2020. The volumes were pushed by domestic consolidation, which composed 79% of M&A volumes.
Above 75% of sales during the month did not inform the deal value through not displaying the complete picture of overall deal values for the month. However, the area saw a marquee deal – Tata’s purchase of Air India from the Government of India for an aggregate value of $2.4 billion. This only estimated for 73% of the total M&A value in October.
While this will be the first privatisation since 2003-04, Air India will be the third airline brand following Tata’s table. Currently, it contains a bulk stake in AirAsia India and Vistara, a shared investment with Singapore Airlines.
“October has been encouraging, both in terms of deal volume and deal value, indicating the continuum in deal activities. While volumes recorded a 2x increase over October 2020, deal values saw a substantial 24% increase. said Shanthi Vijetha, Partner, Grant Thornton Bharat, said
The economy is being bolstered by the rapid improvement in high-frequency indicators such as the e-way bills, GST collection, power demand, rail freight and exports growth, etc. The current pace is likely to re-establish economic growth momentum,” he added. The report asserted that a positive domestic business attitude, continuous accelerated economic improvement across divisions, and global economic improvement aid the overall trend.
The month also witnessed private equity funds inflow in Indian companies amounting to $5.9 billion across 160 deals. While the investment volume nearly doubled compared to a year-ago period, the value saw an 11% reduction owing to decreased average deal size — from $78 million in October 2020 to $37 million this October.
Prompted by the outcome of the COVID-19 pandemic, the hospitality and leisure, pharma and healthcare, e-commerce, retail and consumer sectors remain to stay active collectively, sealing 32% of the M&A deals in October. Moreover, media and entertainment, agriculture, banking, education, manufacturing, professional services, and telecom observed one deal every month.
Interestingly, October observed a course with just three sectors, including start-up, e-commerce, and education, recognising high-value investments of above $100 million in a particular month.
The M&A volumes were driven initially by start-up and IT sectors, with above half the deals amounting to $391 million. The previous month embraced five start-ups into the unicorn club – CoinSwitch, Acko General Insurance, Fasos, Licious, and Vedantu. The month also observed one of the most comprehensive Series A funding in the Indian start-up ecosystem, with CredAvenue raising $90 million led by Sequoia Capital.
