Down 66% YoY, total deal value in Q3FY23 second lowest since 2017: Report

According to Grant Thornton Bharat's Dealtracker September 2022 report, a total of 450 deals worth $10.2 billion were recorded in Q3FY23, 25 per cent below the 600 deals recorded in Q3FY22

The number of deals fell 25 per cent year-on-year (YoY) in deal volumes and 66 per cent in deal values in the third quarter of the current financial year (Q3FY23). This was primarily due to the absence of any big-ticket transactions owing to the cautionary approach of the investors amid macroeconomic uncertainty, a new report said.

According to Grant Thornton Bharat's Dealtracker September 2022 report, a total of 450 deals worth $10.2 billion were recorded in Q3FY23. This was 25 per cent lower than the 600 deals recorded in Q3FY22.

The deal value fell 66 per cent from $29.8 billion in Q3FY22 to $10.2 billion in Q3FY23. These are the second-lowest quarterly values seen in the last five years.

"Two black swan events, the pandemic and the Russia-Ukraine geopolitical conflict, have sparked inflationary conditions and significantly weighed on growth," Shanthi Vijetha, partner of Growth at Grant Thornton Bharat, said.

On a year-to-day (YTD) basis, however, deal values and volumes were up. The deal value was up 57 per cent until September 2022 compared to last year's period. The deal volume was up 10 per cent.

"Owing to the biggest deal witnessed to date, the merger between HDFC and HDFC bank worth $40 billion put the banking and financial services sector in the lead, followed by IT and manufacturing," the report added.

The M&A volumes were down 30 per cent in Q3FY23. The decline in M&A volume was sharper at 62 per cent. The largest M&A deal in Q3FY23 was the acquisition of select port, power and transmission assets from Essar Group by ArcelorMittal Nippon Steel for $2.4 billion.

Q3FY23 also witnessed a 78 per cent decrease in IPO activity and a 92 per cent decline in issue size compared to Q3FY22.

This quarter saw only four IPOs closed in August and September. These were Onecard, Molbio Diagnostics, Tata 1mg and Shiprocket.

"Even as the outlook for global growth remains clouded by uncertainties, domestic growth is expected to hold up in the coming months. As the monetary policy measures aim to anchor inflation expectations, the macroeconomic situation is expected to improve on the back of high-frequency consumption and better industrial indicators," Vijetha added.