Here’s something to cheer about for the India Inc. The much-hyped binding agreement between Mukesh Ambani-owned Reliance Industries and Disney to form a joint venture, combining the businesses of Viacom 18 and Star India, is just a pointer to a significant rise in deal value and volume in Q1, 24, compared to Q4-CY23. The Reliance- Disney pact, which happens to be the largest deal of the quarter, is expected to create a media behemoth across TV broadcasting, streaming, movies and sports and it is not just a one-off deal. Sectors like media and entertainment, power, pharmaceuticals, retail and consumer and financial services- all saw high deal values, showcasing substantial investment in traditional sectors.
The retail and consumer sector continued to display a high deal volume, with 81 deals this quarter, followed by the technology sector which saw 49 deals. Q1-24 witnessed 14 deals with a value in excess of $500 million, as compared to just nine in Q4 CY23, of which 12 are M&A transactions. However, the average ticket size for PE investments saw a decline of 39 per cent, indicating that although the number of deals increased, most of them had smaller ticket sizes. Most deals with disclosed values are in the lower- and mid-market segment, with around 80 per cent being below $50 million, going by a recent study by PwC India. Overall, with 455 deals amounting to $25.6 billion disclosed deal value, the first quarter of 2024 showcases a 24 per cent rise in deal volume as compared to Q4 CY23 – marking a notable resurgence. This signals a shift from the declining trend observed throughout 2023.
Significantly, in Q1 2024, the market activity in terms of volume shows a significant uptick compared to the last two quarters. M&A deals and PE investments rose by 23 per cent and 24 per cent, respectively. The total deal value exhibits a significant rise this quarter, led by M&A deals, where deal value soared from $12.2 billion in Q4 CY23 to $19.6 billion in Q1 CY24 – marking a 60 per cent increase. Despite a slight dip in PE deal value from $7 billion to $ 6.1 billion this quarter, the total deal value for Q1 2024 stands at $25.6 billion – 33 per cent higher than Q4 CY23, which is also 30& higher than in Q1 CY23. The PwC study suggests that M&A deal value soared by 60 per cent, reaching $19.6 billion while private equity (PE) deal value experienced a slight dip.
There were 143 domestic M&A deals, with the largest deal touching $ 4.5 billion. The overall deal value for Q1 2024 stands at $ 25.6 billion, marking a significant increase from both the previous quarter and the corresponding period last year. Hence, it would not be a wrong notion to believe that amidst a landscape ripe with opportunities, the Indian economy has emerged as a beacon of resilience. The first quarter of 2024 showcases the best figures in the last six quarters owing to the momentum of the market and large-ticket deals, hinting at a bold appetite for strategic expansion and market dominance. The quarter has also heralded a promising horizon for capital markets and embodied an unyielding optimism. Deal makers, businesses and investors are understandably looking towards the future with renewed energy and optimism.