M&A deal rises 24% in first quarter of 2024: PwC India report

Business Thursday 25/April/2024 07:31 AM
M&A deal rises 24% in first quarter of 2024: PwC India report

New Delhi: The first quarter of 2024 has shown resilience in deal-making activity, with 455 deals totaling $25.6 billion in disclosed deal value, marking a 24 per cent increase in volume compared to Q4 CY23, as revealed by PwC India's report 'Deals at a Glance'.

This resurgence signals a departure from the declining trend observed throughout 2023.
The report indicates a notable surge in merger and acquisition (M&A) deal value, which reached USD 19.6 billion, reflecting a 60 per cent increase.

Conversely, private equity (PE) deal value experienced a slight dip. Domestic M&A deals accounted for a total of 143, with the largest deal touching USD 4.5 billion.

Dinesh Arora, Partner and Leader - Deals, PwC India, commented on the robust activity seen in Q1 2024, stating, "Amidst a landscape ripe with opportunities, the Indian economy emerges as a beacon of resilience. The first quarter of 2024 showcases the best figures in the last six quarters owing to the momentum of the market and large-ticket deals, hinting at a bold appetite for strategic expansion and market dominance."

He added, "The quarter also heralds a promising horizon for capital markets and embodies an unyielding optimism. As dealmakers, businesses and investors look towards the future, the energy is palpable."

In terms of sector performance, traditional sectors led the way, drawing significant investments in the evolving deal-making landscape.

The media and entertainment sector emerged as the top performers in terms of value, while the retail and consumer sectors maintained their lead in deal volume.

The report highlights a significant uptick in market activity compared to the last two quarters, with M&A deals and PE investments rising by 23 per cent and 24 per cent, respectively.

The total deal value saw a substantial increase this quarter, primarily driven by M&A deals, which surged from USD 12.2 billion in Q4 CY23 to USD 19.6 billion in Q1 CY24.

Despite a slight dip in PE deal value from USD 7 billion to USD 6.1 billion this quarter, the total deal value for Q1 2024 stands at USD 25.6 billion - 33 per cent higher than Q4 CY23 and 30 per cent higher than Q1 CY23.

The quarter witnessed 14 deals with values exceeding USD 500 million, with 12 of them being M&A transactions.

However, the average ticket size for PE investments saw a decline of 39 per cent, indicating a larger number of smaller deals.

Around 80 per cent of total deals were below USD 50 million, mostly in the lower- and mid-market segments.

High deal values were observed in sectors such as media and entertainment, power, pharmaceuticals, retail and consumer, and financial services, indicating substantial investment in traditional sectors.

The retail and consumer sector continued to display a high deal volume, with 81 deals this quarter, followed by the technology sector with 49 deals.

The largest deal of the quarter originated from the media and entertainment sector, with Reliance Industries signing a binding agreement with Disney to form a joint venture, consolidating the businesses of Viacom 18 and Star India.