Dealmakers breathed a sigh of relief as deal volumes broke the downward trend seen quarter on quarter last year. The January-March 2024 quarter saw 455 deals amounting to $25.6 billion of disclosed deal value, according to PwC.

The total deal value rose 30% year-on-year to $25.6 billion in the first quarter of the ongoing calendar year. It is also 33% higher than Q4 CY23.

This was led by merger and acquisition (M&A) deals, where deal value soared from $12.2 billion in Q4 CY23 to $19.6 billion in Q1 CY24. There was a slight dip in private equity (PE) deal value from $7 billion to $6.1 billion.

There were a total 143 domestic M&A deals, with the largest deal touching $4.5 billion.

Sector-wise, traditional sectors took the lead, drawing significant investments in the changing deal-making scenario. The media and entertainment sector topped the charts in terms of value, while the retail and consumer sector continues to lead in terms of the deal volume.

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.

The largest deal of the quarter comes from the media and entertainment sector, where Reliance Industries signed a binding agreement with Disney to form a joint venture, combining the businesses of Viacom 18 and Star India. This is expected to create a media behemoth across TV broadcasting, streaming, movies and sports.

This quarter saw 14 deals with value over $500 million, as compared to just nine such deals in Q4 CY23, of which 12 are M&A transactions.

“Q1 CY24 showcases the best figures in the last six quarters owing to the momentum of the market and large-ticket deals. This hints at a bold appetite for strategic expansion and market dominance,” say PwC.

Although the value increased, the average ticket size for M&A deals remained at $142 million, same as the Q4 CY23, and 42% higher than Q1 CY23. Conversely, the average ticket size for PE investments saw a decline of 39%, from $44 million in Q4 CY23 to $27 million in Q1 CY24. This indicates that although the number of deals is higher, the majority of these deals had smaller ticket sizes. As anticipated at the start of the year, most deals with disclosed values are in the lower- and mid-market segment, with around 80% of the total deals below $50 million, says PwC.

“Amidst a landscape ripe with opportunities, the Indian economy emerges 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 also heralds a promising horizon for capital markets and embodies an unyielding optimism. As deal makers, businesses and investors look towards the future, the energy is palpable,” says Dinesh Arora, partner & leader – Deals, PwC India.

Domestic deals grew by 44% since Q4 CY23, while cross-border deals fell by 10%. With this growth, domestic deals continue to make up the majority with 73% share of the total M&A deals.

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