The first quarter of this year has witnessed a dip in the overall deal value, but deal volume has had an upsurge against the corresponding period in 2013, owing to steady escalation in private equity (PE) investments. Around 51 per cent deal volume has come from PE or venture capital investments alone in this period, according to a Grant Thornton Dealtracker report.

The report highlighted that in Q1, the overall deal activity stood at $6 billion (261 deals) against $7 billion (222 deals) in 2013, and $20 billion (299 deals) in 2012. However, PE investment in Q1 was higher at $2.1 billion (133 deals), against $1.6 billion (90 deals) and $2.1 billion (121 deals) in the corresponding quarter in 2013 and 2012, respectively.

The top sector in merger and acquisitions in terms of value was energy and natural resources, which witnessed 20 per cent ($798 million) of overall deal activity. In terms of volume, IT and ITES sector witnessed 21 per cent (25 deals) of overall deal activity.

The top sector in PE, both in terms of value and volume was IT and ITES, which witnessed 34 per cent ($717 million) of overall deal value and 41 per cent (54 deals) of overall deal volume.

Harish HV, Partner, Grant Thornton, said: “This is an election year, and that brings in its own share of uncertainty. External pressures and political situation have impacted deal values which clearly mean that growth in value will need a better economic scenario, and a better capital and debt market support which has been missing.”

Raja Lahiri, Partner, Grant Thornton, said: “While we are seeing an emerging trend in in-bound deals including some in the energy sector, cross border deal activity still remains subdued. We see an increasing trend in buy-out transactions, but exit challenges for PE funds still continue, which remains the key strategic focus for PE funds in 2014.”

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