Source: Pixabay
- Deal making volume fell by 21% in 2023 to 1,641 deals as compared to the year before.
- Large deals become much rarer with only eight multi-billion-dollar deals.
- PE deals fell in both value and volumes due to startup funding winter effect.
- QIPs saw a multi-fold surge in 2023, overtaking IPOs in funds raised.
"While it was expected that the positive trend of deal-making would continue to revitalise funding in 2023 following India's strong position in global markets in 2022, it was hindered by the lack of liquidity in international markets, volatile market conditions, and cautious investor sentiment,” said
Large deals have also become much rarer in 2023, than they were in the year before. The year saw only eight multi-billion-dollar M&A and PE deals totalling $12.5 billion, as compared to eight totalling $26.2 billion in 2023.
M&A deals which started off very slow last year saw an uptick in the second half. Domestic deals dominated the landscape, with 350 deals valued at $14.4 billion. Inbound activity witnessed substantial growth, featuring 84 deals totaling $7.7 billion.
Outbound activity remained stable, with values declining significantly from $17.9 billion in 2022 to $3.2 billion this year.
Top 5 M&A deals in 2023
| Acquirer | Target | Deal value |
| Suraksha Realty | Jaypee Infratech | $2.45 bn |
| Siemens AG | Siemens | $2.2 bn |
| Walmart | Flipkart Online Services | $1.4 bn |
| TV18 Broadcast | Network18 Media & Investments | $1.2 bn |
| Proximus Opal | Route Mobile | $721 mn |
PE activity continued to slip sharply as funding winter chilled the startup ecosystem. The largest PE deal was Temasek Holdings’ investment in Manipal Health Enterprises for $2 billion.
Startup funding went down by 42% in 2023, but there were pockets of activity. Retail startups led in deals, making up 20%, followed by fintech and SaaS start-ups. E-commerce and IT sectors followed, with 181 deals worth $5.5 billion.
“Despite witnessing overall decline, the banking (financial services), energy (cleantech), manufacturing, and real estate sectors experienced a surge in deal activities. Sectors such as pharma (hospitals and biopharmaceuticals), energy (cleantech), retail, and real estate attracted significant investments,” Grant Thornton said.
India’s deal activity breakdown
| Deal Type | Value | YoY % change | Volume | YoY % change |
| M&A | $25.2 bn | -72% | 494 | 3% |
| PE | $27.4 bn | -23% | 1,045 | -32% |
| IPOs | $6.2 bn | -24% | 57 | 43% |
| QIPs | $7 bn | 3.6x | 45 | 2.2x |
| Total | $66 bn | -52% | 1,641 | -21% |
QIPs surge ahead of IPOs
While primary market activity surged in 2023, the value of total funds raised declined due to the impact of LIC’s IPO in 2022. Here too, the activity surged sharply in the second half after the stock markets revived.
“In 2023, India's IPO market thrived due to robust domestic demand fueled by a growing middle class and increased retail participation in the stock market,” the report observed.
Qualified institutional placements (QIPs) however overtook IPOs, to raise as much as $7 billion. The size of fund raising surged 3.6 times over, and deal volume also went by 2.2 times.
“This surge in QIP activity signals an improving investor outlook on the Indian market amid anticipated economic growth. The manufacturing sector led with 15 QIPs, followed by the banking and financial services sector with 12 QIPs,” said Grant Thornton.