Volumes up, values down: April 2024 marks notable shifts in India's deal-making landscape

• Deal volumes jumped by 21% to 191 while the values declined by 37% to USD 9.4 billion in April compared to March 2024
• Adani Group's three major domestic consolidations of around USD 2 billion in value marked 38% of the total deal values in April 2024.
• Experts predict sustained momentum and growth in deal activities, supported by strong fundamentals and a conducive investment climate.

In the dynamic landscape of Indian business transactions, the manufacturing sector has emerged as a beacon of value, while consumer retail reigns supreme in volume. April 2024 marked significant shifts in deal-making compared to the month before with a notable absence of billion-dollar deals.

Overall deal volumes jumped by 21% to 191 while the values declined by 37% to USD 9.4 billion in April compared to March 2024, as per the latest Grant Thornton Bharat Dealtracker report. The past month has witnessed a flurry of activity, with notable shifts and surges across various industries, offering a compelling glimpse into the evolving economic terrain.

"Deal volumes increased in April 2024 marking the highest monthly volumes since May 2022. There were no billion-dollar deal but witnessed 12 high value (> USD 100 million) deals amounting to USD 3.8 billion," said Shanthi Vijetha, Partner at Grant Thornton.

Adani Group leads M&A activity

At the forefront of deal values stands the manufacturing sector, boasting an impressive tally of nine transactions amounting to a staggering USD 1,919 million. This surge is underpinned by two monumental deals, notably the Adani Group's strategic stake increase in Ambuja Cement and ACC, which was the most significant M&A activity of the month.

Adani Group secured a significant 7.5% stake in Ambuja Cements, injecting a substantial USD 1.8 billion into enhancing the manufacturing capacity of cement makers, signaling a bold step towards industry expansion and innovation. Overall, the group's three major domestic consolidations of around USD 2 billion in value marked 38% of the total deal values in April 2024.

Despite this, the merger and acquisitions transactions saw the highest decline in value, dropping by 75 percent to USD 2.5 billion from USD 10.2 billion in March. This was mainly because of the absence of large-scale mergers like those seen in March. However, M&A deal-making remained robust in April with significant domestic consolidations.

"This month's activity, characterized by deal volumes spanning across breadth of sectors and by large deals by select players, illustrates a market that is both diverse and robust," observed Shanthi.

Private Equity landscape remains vibrant

The private equity transactions also experienced a slight decrease in value, reaching USD 2.666 billion, according to the report by Grant Thornton Bharat. However, with a total of 130 deals, the overall market landscape remains vibrant.

The numbers indicate a clear shift towards enhanced number of investments while the size of the deals remains smaller compared to previous months. "The stable value of investments, despite the higher number of transactions, indicates a strategic adjustment towards spreading investments across various sectors, aiming to capitalize on emerging opportunities while mitigating large-scale risks," says the report.

"The deal outlook for 2024 continues to remain positive as India stands at the cusp of a new era of growth and investment supported by a growing consumer market, a flourishing tech start-up ecosystem, and supportive government policies," concludes Shanthi Vijetha.

Factors that could influence domestic markets in the near future include the outcome of Lok Sabha elections, global and domestic trends in interest rates driven by inflation, and supply chain dynamics. However, experts predict sustained momentum and growth in deal activities, supported by strong fundamentals and a conducive investment climate.