According to EY's Transactions Quarterly Report, while the number of deals increased to 252 in the July-September quarter from 234 in the year-ago period, the cumulative disclosed deal value fell to $6.2 billion from $13.7 billion in the same period last year.
"In the last few months, a sense of caution prevailed within the investor and business communities. The companies essentially adopted a wait and watch approach in pursuing big-ticket acquisitions," said Amit Khandelwal, Partner and National Leader, Transaction Advisory Services, EY.
However, the market witnessed healthy activity in smaller value deals. Consequently, the third quarter witnessed a fair increase in deal volume, while deal value reduced compared to the same period last year, Khandelwal added.
The report noted that domestic deal activity remained stable in terms of volume, indicating that the local market remained the preferred destination for businesses.
Cross-border M&A activity, was, however, "quiet" during the quarter. While the total inbound deal value decreased to $441 million from $3.6 billion, the outbound activity remained almost flat at $304 million.
The US continued to be the most active cross-border M&A partner for Indian companies during the quarter, with a total of 27 deals for a total disclosed value of $113 million. The UK and Singapore emerged as other preferred partners with investments across sectors.
From a sector perspective, technology led the activity, both in terms of value and volume with 33 deals totalling to $3.8 billion, followed by financial services, recording 32 deals with a disclosed value of $291 million, the global consultancy major said.
Khandelwal noted that "while the economy witnessed a slowdown in growth rates in the last two quarters, some of the high-frequency economic indicators are starting to show signs of revival".