India Inc recorded only 89 deals valued $1.8 billion in February. This translated to a 54 per cent decline in volumes and a significant 60 per cent decline in values, compared to February 2022, as investors continued treading cautiously amid macroeconomic uncertainties, according to Grant Thornton Bharat’s Dealtracker February 2023 report. 

This also marked the second-lowest deal volumes and lowest values recorded since 2014. Mergers and acquisitions (M&A) deal activity witnessed a significant downtrend, both in terms of deal volumes by 48 per cent and values by 47 per cent, clocking 24 deals at $755 million, compared to February 2022, said the report. 

Shanthi Vijetha, Partner, Growth at Grant Thornton Bharat, said: “US economic data has been pointing towards a slowdown; however, the recession is not confirmed yet. China has seen an accelerated reopening, and that has provided a boost to the commodity market.” 

On the domestic front, the policy review also acknowledges that domestic economic activity is expected to remain resilient, aided by the sustained focus on capital and infrastructure spending in the Union Budget 2023-24. While the deal activity is subdued, the Indian market is still considered to provide good opportunities for deals/investments, she added. 

The Private equity (PE) investment trend also witnessed a drop, both in terms of deal values and volumes over February 2022, recording only 65 deals worth $1 billion. The month recorded the lowest monthly deal volumes and values since August 2020. The decline in PE funding was largely due to uncertain market conditions and the wait-and-watch approach adopted around the Budget 2023 - 24, said the report. 

It further noted that year-to-date (YTD) 2023 witnessed a major decline in deal volumes as well as values, recording 234 deals valued at $4.5 billion. This was a 46 per cent decline in overall volumes and a 58 per cent decline in values over YTD 2022.

YTD 2023 recorded one IPO with an issue size of $8 million, compared to three IPO issues, raising $1 billion in YTD 2022. QIP, on the other hand, saw muted activity, compared to two issues raising $264 million over YTD 2022. Both IPO and QIP activities continued witnessing a decline amid volatile markets.