Strong PE activity, surge in M&As drive 469 deals valued at $24.5 bn in Q1 of 2024

Deal volume dropped 16 percent from 143 in Q4CY23 to 120 in Q1CY24

The first quarter of this year saw 469 deals totalling to $24.5 billion, the highest quarterly volume and value of contracts since the second quarter of CY22, fuelled by high-value agreements, strong PE activity, and a robust rebound in the primary market.

The $8.5-billion mega-merger between Reliance and Disney was the highlight of the quarter, constituting a significant portion of the overall deal value in Q1 2024. Excluding this, there was a decline in overall values.

The 469 deals include 120 mergers and acquisitions worth $12.3 billion, 307 PE/VC deals worth $8.1 billion, and 24 IPOs and 18 QIPs worth $2 billion each, according to a report by Grant Thornton.

“With upcoming events such as the elections, coupled with a strong pipeline of deals and increased attention from private capital, the outlook for 2024 remains optimistic,” said Shanthi Vijetha, partner, growth, Grant Thornton Bharat.

M&A deals 

The deal volume dropped 16 percent from 143 in Q4CY23 to 120 in Q1CY24. However, the value jumped by 38 percent to $12.3 billion. While domestic M&A volumes experienced a decline over the past year, cross-border activity surged to its second-highest quarterly level in five years.

The media and entertainment sector led in terms of value with 14 transactions of $9.1 billion contributing to 74 percent of the total M&A activity. This was primarily due to the $8.5-billion Reliance and Disney merger. On the other hand, the IT sector led in volumes with 19, however, values were relatively low at $270 million. Analysts at Grant Thornton expect the technology sector to see continued growth in cross-border M&A in 2024 as AI/machine learning gains prominence.

Private Equity (PE) Deals

PE deals saw a 10 percent increase in volumes and a 51 percent jump in values from Q4CY23. Sectors such as telecom and infrastructure, alongside retail and media, dominated deal values, while retail, IT, and banking led in terms of volumes.

“The flourishing capital markets have led to a dual predicament: promoters demanding listed company-type valuations and Limited Partners (LPs) setting high benchmarks by comparing capital market returns with those of PE funds, thereby complicating fundraising efforts. Despite these hurdles, the shifting global investment landscape, particularly the pivot away from China, indicates a promising horizon for Indian entrepreneurs, potentially unlocking five years of heightened investments,” said Vishal Agarwal, Partner and Private Equity Group & Deals Tax Advisory Leader.

Further, Q1CY24 saw the emergence of $2-billion deals and eight high-value deals comprising 70 percent of the total PE deal values. India also saw the birth of two unicorns. OLA founder Bhavish Aggarwal’s Krutrim SI Designs raised $50 million from a clutch of investors in January this year, including Matrix Partners and became India’s first AI unicorn.

The other one is SaaS-based B2B fintech firm Perfios which raised $80 million in March from Teachers’ Venture Growth (TVG) and crossed the $1 billion valuation mark.

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