February 18, 2024
India Witnesses Over 50 Percent Drop in Deal Values in 2023: Grant Thornton Bharat Report
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India Witnesses Over 50 Percent Drop in Deal Values in 2023: Grant Thornton Bharat Report

India Witnesses Over 50 Percent Drop in Deal Values in 2023: Grant Thornton Bharat Report

India Witnesses Over 50 Percent Drop in Deal Values in 2023: Grant Thornton Bharat Report

A recent report by consultancy firm Grant Thornton Bharat revealed a substantial decline in deal values in India for the year 2023, reaching $66 billion, marking a decrease of over 50%. The report, released on January 19, highlighted a drop of over 20% in deal volume, with 1,641 deals compared to the previous year.

Factors Contributing to the Decline

Shanthi Vijetha, a partner at Grant Thornton Bharat, pointed out key factors contributing to this significant drop. The lack of liquidity in international markets, volatile market conditions, and cautious investor sentiment were identified as major hindrances to deal activities throughout 2023.

“While India’s focus on sustainability and environmental responsibility positions it as an attractive hub for global economic opportunities, overcoming challenges such as currency strength and global instability is crucial,” added Vijetha.

Merger and Acquisition (M&A) Impact

The report highlighted a substantial impact on merger and acquisition (M&A) deal values, witnessing a sharp 72% decline to $25.2 billion across 494 transactions. Outbound M&As were particularly affected, dropping to $3.2 billion from $17.9 billion in the previous year. The sluggish M&A trend in the first half of 2023 recorded deal values of only $7.8 billion.

Private Equity (PE) and IPO Trends

On the private equity (PE) front, 2023 witnessed a 23% decline in both deal volume and value, with 1,045 deals amounting to $27.4 billion. The most significant deal in this category was Temasek Holdings’ $2 billion investment in Manipal Health Enterprises.

While 57 companies went public in 2023, raising $6.2 billion, Initial Public Offerings (IPOs) values saw a nearly one-fourth decrease compared to the year-ago period. However, Qualified Institutional Placements (QIP) showed improvement, with 45 companies raising $7 billion, a substantial increase from $1.5 billion raised by 14 companies in 2022.

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