Despite the fall, India saw 87 deals in Q1, securing 15.4 per cent market share in the APAC region, almost on par with 2019 levels, according to the data collated by Mergermarket.
The 31.1 per cent plunge in overall deal-making was driven by very low inbound deals which plunged 63.9 per cent, but both outbound and domestic deal spaces remained hectic, it added.
While the domestic deal market saw an 11.1 per cent growth, outbound deals grew by around USD 500 million.
"Deal-making might regain momentum in the second half thanks to steps taken by the government to attract foreign investors. Medical and e-commerce firms may also become magnet for investment," the report said.
According to the data, the overall deal-making has been recorded at USD 18.7 billion across 87 deals in Q1, a fall of 30.1 per cent in terms of value, but still securing 15.4 per cent market share in the APAC region deal chart, almost on par with 2019 levels.
Four of the top 10 deals were driven by the government selling state-owned assets, pushing domestic deal making up by 11.1 per cent to USD 13.4 billion and 54 in total, compared to the year-ago period when it stood at USD 12 billion across 57 deals.
Inbound deals were only USD 5.3 billion across 33 deals and was hit hard -- plunging 63.9 percent in value as travel restrictions following the pandemic affected foreign investors' activity.
Only five deals were announced by foreign investors in March.
Financial services sector saw the highest activity both in terms of value and count at USD 7.2 billion involving 18 deals, largely driven by the consolidation process among domestic banks, during which six banks were acquired for USD 4.7 billion, accounting for nearly two-thirds of the deal value.
On the other hand, industrials and chemicals sector, which used to register strong M&A activity, shrank 88.9 per cent to USD 846 million involving just 13 deals.
PE buyouts continued to lose momentum by reaching only one-fourth of what it did in Q1 of 2019 which was a record. It notched up only 18 buyouts worth USD 812 million during the quarter.
The technology sector with USD 483 million (eight deals) led the way, accounting for over half of the deal value.
But PE exits at USD 3.3 billion across five deals was pushed up by two large deals in the transportation sector -- 3i Group and Navayuga Group exiting Krishnapatnam Port for USD 1.6 billion, and JM Financial Investment Managers, GMR Group, Macquarie SBI Infrastructure Management and Affirma Capital exiting GMR Airports for USD 1.5 billion.
Medical sector, especially medical devices and healthcare services providers, are seeing increased activity.
Outbound deal-making at USD 779 million across 15 deals, was up 25.1 per cent. It was led by Dr. Reddy's acquisition of Wockhardt's branded generics business for USD 259 million.
Meanwhile, domestic companies made five deals outside worth USD 451 million. BEN ABMABM