New Delhi: India Inc saw the steepest decline in deal values owing to the lack of big-ticket investments last month, registering 171 mergers and acquisitions (M&A) and private equity (PE) deals valued at $2 billion, a new report has shown. At $280 million for 32 deals in July, the M&A deals witnessed a significant downtrend both in terms of deal volumes, by 14 percent, and deal values by 95 percent, according to Grant Thornton Bharat Dealtracker report.


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Cross-border transactions recorded the second lowest, both in terms of deal volumes and values in the last 12 months owing to global tensions. With 28 percent of M&A deal volumes each, the start-up and IT sectors continued to dominate deal activity with nine deals each cumulatively valued at $162 million. (Also Read: 50% of companies planning job cuts amid economic downturn: Report)


"Like many other countries, Asia's third-largest economy has also been grappling with soaring inflation, aggravated by rising commodity prices. A weaker rupee has further bumped up imported inflation," said Shanthi Vijetha, Partner, Growth, Grant Thornton Bharat. Nevertheless, start-up, e-commerce and IT led the deal volumes for the month, while "infra, pharma, retail, and banking sectors topped the overall value". (Also Read: Tamil lyricist finds chicken in Swiggy order, says 'Strict Vegetarian')


"The month saw the birth of only one Unicorn, OneCard, in the fintech segment," she mentioned. While M&A deal activity saw an uptick in deal volumes compared to June, which saw the lowest monthly volumes in the last 19 months, the deal values saw a decline due to a lack of high-value transactions and non-disclosure of values in the majority of the deals.


The PE landscape saw 139 deals valued at $1.7 billion. While PE transactions continued to account for over 80 percent of overall deal activity, deal values witnessed a significant decline. "The start-up sector continued to drive the PE deal volumes for July 2022 with a 70 percent share of volumes, with investment values of $0.6 billion," the report said.


The retail tech segment led the investment volumes in the start-up sector with 20 percent deals, followed by enterprise application and infrastructure and fintech at 18 percent each. The year-to-date (YTD) 2022 recorded 17 initial public offerings (IPO) with an issue size of $6 billion, compared to 28 IPO issues, raising $7 billion in YTD 2021, the report mentioned.