India Inc signs over 1,100 deals worth over $104 billion in first half of 2022

As many as 1,149 deals valued at $104.3 billion were signed by India Inc in the first half of this year despite global uncertainties, a report showed on Thursday.
According to the Grant Thornton Bharat Dealtracker report, the numbers show a 34 per cent increase in overall deal volumes, while deal values more than doubled with a 143 per cent rise in comparison to the same period last year.

The report also said that the country saw $6 billion from 17 IPOs -- the highest values raised in the first six months.

M&A deal values recorded an over two times rise as compared to H1 2021, driven by HDFC Bank and HDFC Ltd's $40 billion merger, LTI and Mindtree merger ($17.7 billion) and Adani Group-Holcim Ltd's $10.5 billion deal.

These three deals alone accounted for 86 per cent of the total M&A deal values in H1 2022.

"Amid macro-economic stress, the overall deal sentiment for 2022 is expected to continue given the support from the government on infrastructure spending, supply-side response and key fiscal measures," said Shanthi Vijetha, Partner, Growth, Grant Thornton Bharat.

"However, corporates and more importantly PE/VCs may employ a cautiously optimistic approach as the impact of the global economic slowdown on the Indian economy becomes evident," Vijetha added.

Even as private equity deal activity continued to dominate total deal volumes with 3/4th share, deal values were driven by mergers and acquisitions with 76 per cent of the total deal values in H1 2022.

Sectors like startup, e-commerce and IT led deal activity in H1 2022, accounting for 76 per cent of all deals followed by retail, education and pharma sectors.

With 284 deals, the M&A space witnessed a significant increase in the first half and represented a 27 per cent growth over H1 2021.

In terms of in terms of overall deal value in H1 2022, the banking and financial sector had the highest contribution of 53 per cent followed by IT and manufacturing sectors.

Meanwhile, The private equity and venture capital investments saw record volumes and values in the first six-month period with 865 deals at $25.1 billion.

However, investment volumes and values saw a 12 per cent and 15 per cent decrease with respect to H2 2021 (the preceding six months), the report noted.

"The drop in the deal values is due to a fall in big-ticket investments coupled with prevailing factors including geopolitical tensions, stock market volatility, concerns about the rise in commodity prices and the impact of inflation," the report noted.

Nevertheless, large funds like Tiger Global, Westbridge, Baring PE, TPG, Brookfield, Blackstone and Warburg Pincus, among others, continued to keep pace with their activity.

With a growth of 69 per cent in deal values, the start-up space attracted the most investment at $5.1 billion across 550 deals, the report said.