M&A, other corporate deals surpass pre-Covid levels in 2022: PwC India report

"However, excluding the HDFC Ltd and HDFC Bank merger (worth USD 60 billion), M&A deal values were about 15 percent lower than that of 2021. Private equity (PE) investments stood at USD 52 billion, 22 percent lower than 2021 but 20 percent higher than all other preceding three years in terms of value and quantum," it said.

It is to be noted that deal activity witnessed a steady decline quarter-on-quarter after a strong start in the initial months of 2022, the report said, and 70 percent of deal activity in terms of value and volumes was witnessed in the first half of 2022, with only 30 percent activity in the second half of 2022.

"The year 2022 has shown us that investor perspective on India is long-term, and the current market slowdown, while tough, will likely not result in major concerns for most. We believe M&A will be an essential instrument for companies to move forward, integrate supply chains, beat disruption and boost their market share," said Dinesh Arora, Partner & Leader – Deals, PwC India.

On M&A activity, the report said 72 percent of disclosed deal value was generated from domestic deals in 2022 (88 percent, if the HDFC merger deal is considered). Companies sought to consolidate positions, curb competition and enter new disruptive segments, leading to some of the largest-ever transactions in the banking, cement and aviation sectors.

Sectors such as financial services, technology, healthcare, energy and power, and industrials are expected to stay active on the domestic front in terms of value creation and market share gain.

On PE activity, it said early-stage deals saw an uptick in deal value by 13 percent compared to 2021, reflecting investor confidence and the outlook for the Indian startup sector, while buyouts and late-stage deals witnessed a 55 percent and 33 percent dip in deal value, respectively, compared to 2021.