India’s deal making stayed cautious in 2023, declined by over half to $66 bn

India’s deal making stayed cautious in 2023, declined by over half to $66 bn
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.
The stock market may have hit new highs in 2023, but deal making activity continued to battle the liquidity crunch. India’s deal making slumped in 2023. In terms of value, it slipped by 52% to $66 billion compared to 2022. At 1,641 deals in total, its volumes also shrunk by 21%, as per a report by Grant Thornton.

"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 Shanthi Vijetha, partner, growth at Grant Thornton Bharat.

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. Samvardhana Motherson executed five outbound transactions valuing $879 million contributing to 28% of the overall activity.


Top 5 M&A deals in 2023
AcquirerTargetDeal value
Suraksha RealtyJaypee Infratech$2.45 bn
Siemens AGSiemens$2.2 bn
Walmart Flipkart Online Services$1.4 bn
TV18 BroadcastNetwork18 Media & Investments$1.2 bn
Proximus OpalRoute Mobile$721 mn
Source: Grant Thornton

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 TypeValueYoY % changeVolumeYoY % change
M&A$25.2 bn-72%4943%
PE$27.4 bn-23%1,045-32%
IPOs$6.2 bn-24%5743%
QIPs$7 bn3.6x452.2x
Total$66 bn-52%1,641-21%
Source: Grant Thornton

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.


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