The flow of deals in October dropped by over 40 percent on-year, and the quantum of deals is likely to gain momentum in the first quarter of next year, according to Prashant Mehra, Partner, Grant Thornton Bharat.
According to the Grant Thornton deal tracker report, October recorded the lowest volume witnessed in 2022. There was a 42 percent fall in volumes and a significant 77 percent decline in values as compared to October 2021.
During the month, 129 deals valued at USD 2.1 billion were recorded, as per the report.
Mehra, while speaking to CNBC TV-18, said there are a lot of incoming deals and deal closures in the month of November.
“If we look at year-to-date (YTD) and compare it with last year, we are still 50 percent higher in terms of value,” the expert added. “Whereas the volume increase has been a meagre 2-3 percent.”
YTD 2022 recorded 23 initial public offerings (IPO) with an issue size of USD 8.8 billion, and YTD qualified institutional placement (QIP) saw 12 issues raising USD 1.1 billion, the report said.
"Now that the FY23Q2 results are out, the balance sheet seems healthy, with a focus on domestic growth. But, at the same time, there is an opportunity in the market for consolidation with many deals under the pipeline," Mehra noted.
Amid the market volatility and economic uncertainty, Mehra said, "as far as the global indicators are concerned, a lot of counties are going under recession.”
But, India’s “economic indicators continue to be strong. This will ensure that not just investments are attracted towards India but consolidation keeps happening as well."
He expects the deal flow to start picking up by the first quarter of next year. "Once the valuation normalisation happens and the block deals have seen the light of day, traction will continue in the first quarter," Mehra added.
"Which is when we hope to see a lot of technology IPOs, between January to March next year."
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