India continues to see a strong growth in mergers and acquisitions and private equity deals activity backed by consolidation among domestic players. The year so far has recorded 542 deals—M&A and PE—worth $71 billion (Rs 4.48 lakh crore), a significant 86% increase in the deal values, which also marks the highest year-to-date values recorded, supported by increased big ticket transactions, according to the estimates of Grant Thornton India, an advisory firm.

M&A values recorded a healthy two-fold increase year-on-year in the deal values. This was primarily on account of revived domestic and cross-border deal activity, witnessing an increase of over six times in deal values. The year so far has registered 10 deals in the billion-dollar category and 24 deals valued at and over $100 million each. Driven by the largest deal in the ecommerce sector till date with Walmart’s 77% stake acquisition in Flipkart for $16 billion, the sector led the deal activity with 62% of the total M&A deal values. This deal alone contributed to 62% of total M&A values in May.

“Entering India and countering global competitor strategies seem to be the motives for large inbound transactions, and domestic consolidations for enabling operational efficiency appear to be the flavour for domestic transactions. Though in deal value terms, manufacturing and e-commerce contributed to 98% of the M&A transactions, deal volumes in startups, banking and financial services, IT and IT enabled services and pharma and healthcare sectors contributed to 54% of the deal volumes,” said Pankaj Chopda, director, Grant Thornton India LLP, in a report.

According to Chopda large inbound transactions are an indication of the rising confidence among the global fraternity about the size of the Indian market and its importance in becoming a visible player in the global community. “This trend is expected to trigger more inbound transactions and also consolidation in the domestic market for better visibility to the global businesses,” he said.

The month of May saw 99 deals (M&A and PE) worth $27 billion, driven by a more positive global economic outlook, investment from emerging markets, the expansion of technology across industries and strong corporate balance sheets. This also marks the highest monthly deal values recorded till date. Compared to April, May was promising with a strong 34% increase in deal values and 15% increase in the deal volumes, indicating increased deal activity.

The startup sector led the deal volumes, capturing a 17% share garnering $36 million. The manufacturing sector witnessed three billion-dollar transactions.

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