M&As register huge drop in 2023, overall deal values halve to $66 billion

Deal values in India more than halved in 2023 to USD 66 billion despite high growth, as investors took a wait-and-watch approach, a report said on Friday.

From a volume perspective, there were 1,641 deals -- a drop of more than 20 per cent over 2022 -- the report by consultancy firm Grant Thornton Bharat said.

The firm's partner Shanthi Vijetha said lack of liquidity in international markets, volatile market conditions, and cautious investor sentiment hindered deal activities in 2023.

"As India's emphasis on sustainability and environmental responsibility positions it as an attractive hub for opportunities in the global economy, we must first overcome challenges such as currency strength and global instability," Vijetha added.

Merger and acquisition deal values dropped 72 per cent to USD 25.2 billion across 494 transactions, impacting the overall number the most, the report said.

Outbound M&As were at USD 3.2 billion -- as against USD 17.9 billion in the year-ago period -- were the biggest drag, the report said, adding that the overall M&As were sluggish in the first half of the year, which recorded deal values of only USD 7.8 billion.

The biggest transaction was Suraksha Group's acquisition of Jaypee in the real estate sector that raked in USD 2.5 billion.

On the private equity front, 2023 witnessed 1,045 deals with a collective value of USD 27.4 billion, which was a 23 per cent decline over the previous year.

The biggest deal was Temasek Holdings' investment in Manipal Health Enterprises for USD 2 billion, the report said.

A total of 57 companies went public and raised USD 6.2 billion in 2023, but the Initial Public Offers (IPOs) values were down by nearly a fourth as compared to the year-ago period as the average amount of money raised went down.

Qualified Institutional Placements (QIP) showed an improvement in 2023, as a greater number of firms preferred it for raising funding, the report said, pointing out that 2023 saw 45 companies raising USD 7 billion as against USD 1.5 billion by 14 companies in 2022.