Deal values plummet by 78% from Jan-Jun to $23 billion, says report

Deal making by India Inc has suffered severely due to economic challenges in the first half of this year, a report said on Tuesday.

There were only 676 deals with an underlying value of USD 23 billion in the January-June 2023 period, 78 per cent down in value terms and a fall of 42 per cent in terms of volume, consultancy firm Grant Thornton Bharat said.

Merger and acquisition activity suffered the most, with the values down 92 per cent to USD 6.685 billion, the report said, adding that there was a much higher base in the year-ago period which witnessed the mergers of HDFC-HDFC Bank and also LTI with Mindtree.

"The first half of 2023 witnessed a decline in deal activity in India, primarily due to uncertainties causing supply chain disruptions, leading to inflation, and fluctuating interest rates," its partner Shanthi Vijeta said.

Vijetha, however, feels more optimistic about the future quarters, given macroeconomic conditions, reduced market volatility, and stable interest rates.

In the private equity/venture capital (PE/VC) funds space, 521 deals totalling USD 16.4 billion were recorded, which represented a 40 per cent decline in volumes and a 35 per cent decline in terms of value, the report said.

Three billion-dollar deals and 29 high-value deals in the PE/VC sector helped mitigate the impact of the downturn in the mergers and acquisition activity, it said.

The pharma, healthcare, and biotech sectors emerged as the leader in terms of value on the back of a one-billion-dollar deal and three other high-value deals within the sector, which were valued at USD 3.45 billion, the report said.

In the first half of 2023, there were as many as 11 initial public offering (IPOs) worth USD 1.4 billion, a 35 per cent decline in terms of volume and a 77 per cent decrease in the total value compared to the same period in 2022.