2023 witnesses record-breaking block deals, private equity & venture capital stole the spotlight

2023 has been a blockbuster year for deal makers as it’s clearly a year of block deals with M&A activity being muted. Over 80 blocks worth over ₹15 billion changed hands in the year, largest ever seen in the Indian markets.

Private Equity, Venture Capital made exits worth over $12 billion and most of these deals were in sectors like Tech, Financial Services, Industrials and IT.

Bulge bracket PE firm, BPEA EQT’s large exit from Coforge is a game changer as the investors for the first time saw enough appetite in Indian market to exit large investments. This has lifted the confidence of foreign investors on large bets in India.

Block deals kept rolling out till the last days of December with Blackstone exiting Embassy Reit with around $1.8 billion trade.

Even large promoter share sales have been a highlight in large companies like Vedanta and Interglobe Aviation.

Investor exits as an emphatic theme for the deal street this year. Blackstone, Softbank top the charts with close to $2 billion worth of exits.

BPEA EQT’s Coforge exit marked the top exit by a PE firm. Other bulge bracket PE firms also capitaliSed on the equity window provided by our markets. Blackstone’s clean out trade in Embassy REIT marks an important milestone in REIT investments & interest amongst institutional investors.

What also stands out is the share sale action in the new age listed companies like Zomato, Paytm, Nykaa which saw multiple block deals throughout the year. Zomato saw 8 tranches of share sales worth close to $2 billion.

Investors in Paytm sold shares worth over a billion dollars in several trades spanning till the second half of December. Nykaa, Policybazaar, Delhivery all saw blocks worth around half a billion dollars each.

PE exits far outpace the investments this year due the equity market window and the valuations run up made investments expensive. Significant PE investments come from the healthcare sector which was the top theme for 2023.

Hospitals in particular stand out which will see traction in 2024 as well.

Topping the list of investments is Temasek’s investment in Manipal Health, Baring Asia along with ChrysCapital made a big bet on HDFC Credila and then there are a bunch of over half a billion dollar investments by foreign funds.

While M&A of high intensity has been muted but there are some significant deals on my list for the year with Proximus buying Route Mobile in tech space, Nirma buying Glenmark Life Science is a significant deal between 2 Indian promoter groups.

From the conglomerates, Titan picked Caratlane in its shopping cart to further its omnichannel play, a theme which will continue to see transactions in future as well. Financial services is another space very active on the deal street.

AU Small Finance Bank’s bet on Fincare Small Finance Bank stands out in 2023.

This year the excitement on the deal street came more from the deals un-done: Cipla’s stake sale caught a lot of attention but is now in cold storage.

M&M bought a minority stake in RBL Bank which raised questions on the rationale and the future of this investment will be keenly watched. The biggest miss for 2023 is the 2 year long saga of the largest media merger of Zee and Sony which continues in the new year.