New Delhi, India – January 30, 2024: Mazars in India’s Q4 2023 M&A deal tracker report highlights the resilience of the Indian dealscape, rebounding from earlier slowdowns. This quarter witnessed 164 deals totaling US$4.1 bn, reflecting a 5.1% increase in volume and a 4.5% rise in overall deal value, signifying a robust recovery. Noteworthy transactions, such as the merger of Fincare Small Finance Bank and the acquisition by Zurich Insurance, are featured in the report, demonstrating the adaptability of the Indian business environment despite global challenges. The report meticulously analyzes and presents insights into the dynamic M&A activity that unfolded in the Indian market.
Quarter-wise M&A activity:
Following a slowdown in the latter half of 2022 and early 2023, the Indian dealscape experienced robust growth in Q4 2023. The period witnessed 164 deals totalling US$4.1bn, marking the highest volume since Q2 2022. This growth, reflecting a steady 5.1% increase in deal volume and a 4.5% rise in overall deal value compared to the same period in the previous year, highlights the resilience and recovery of the Indian M&A landscape. Notably, four deals surpassed the US$200 m mark, including the standout merger of AU Small Finance Bank with Fincare Finance Bank for an impressive US$528.7m, shaping the overall M&A landscape in India.
Domestic M&A trend:
Domestic transactions continued to dominate the M&A landscape during Q4 2023, representing 66.5% of the total deal volume and 63.8% of the total deal value. The total number of domestic transactions grew moderately by 3.8% to 109 deals during the quarter, while the overall value witnessed a dip of 8.2% to US$2.6bn. Notable transactions include AU Small Finance Bank’s merger and PCBL’s acquisition of Aquapharm Chemicals.
Inbound M&A trend:
Inbound M&A activity exhibited mixed results in Q4 2023. Deal value for inbound transactions soared by 53.4%, reaching US$814.4m, while the total deal volume contracted by 14.3% to 18 deals. Zurich Insurance’s acquisition of a majority stake in Kotak Mahindra General Insurance Company at an estimated value of US$486.5m and Varun Beverages’ acquisition of The Beverage Company Ltd. at an estimated value of US$163.5m were the standout inbound deals during the quarter.
Outbound M&A trend:
The outbound deals category exhibited contraction in both deal volume and value during Q4 2023. The total number of deals in the category shrunk by a significant 34.0% to 15 deals, compared to 23 deals a year ago. In terms of deal value, the category witnessed a marginal contraction of 1.2%, recording deals worth US$523.2m. Only two deals in this category surpassed the US$100m threshold, including JSW Infrastructure’s acquisition of Marine Oil Terminal for US$187.0m and Mphasis’ acquisition of Sonmick Partners valued at US$132.5m.
M&A sector Trend:
In terms of volume, most sectors, barring consumer staples, information technology, and materials, either witnessed growth or recorded the same number of deals in Q4 2023 as compared to Q4 2022. In terms of value, financials emerged as the most active sector, recording deals over US$1.2bn (representing ~30% share of the overall deal value), followed by materials with a ~20% share and industrials with a ~17% share. Meanwhile, in terms of volume, information technology emerged as the top sector with approximately a 23% share, followed by consumer discretionary and healthcare with ~16% share, respectively.
M&A transaction size trend:
Deal sizes in Q4 2023 showcased a mixed trend. The US$5 m to US$25m and US$100m to US$1 bn categories saw positive growth, with a 20.8% increase in the former and a substantial 71.4% surge in the latter. In contrast, the US$25m to US$100 m category experienced a significant decline, contracting by 30.8% to 18 deals, down from 26 deals a year ago. Looking at deal values, only the US$100m to US$1bn category demonstrated growth in Q4 2023. The overall deal value for this category expanded by over US$660m, marking a notable 30.3% increase to US$2.8bn during the quarter. Conversely, the US$25 m to US$100m category witnessed the most substantial decline, with the overall deal value falling sharply by 35.2% to US$870.4m in the quarter, down from US$1.3bn in Q4 2022.
Akhil Puri, Partner, Financial Advisory, Mazars in India, reflects on the Q4 2023 M&A Deal tracker teport, noting. “In Q4 2023, India’s M&A landscape witnessed a resilient comeback, recording 164 deals totalling a remarkable US$4.1bn– the highest since Q2 2022. Positioned strategically amidst global challenges, India anticipates growth post-General Elections and Budget 2024. Despite global headwinds, the emergence of green shoots in the past two quarters has instilled a sense of cautious optimism in the corporate realm. With India’s robust economic fundamentals, fortified capital markets, and a low external debt-to-GDP ratio, M&A activity in 2024 is poised to remain resilient, driven by sustained domestic demand and strengthened corporate balance sheets.”
For more detailed insights and analysis, you can access the complete M&A Deal Tracker Report by Mazars in India.
