India records 89% decline in deal values in April amid HDFC Bank-HDFC mega merger: Report

The decline in values was mainly due to the absence of big-ticket investments in addition to one of the biggest mergers, HDFC and HDFC Bank worth $40 billion witnessed in April 2022. The report further notes that while domestic activity dominated the M&A activity, cross-border activity witnessed the lowest April month deal volumes and values since 2011.

The deal of the month was Ipca’s 33 percent acquisition of Unichem for $126 million. Top five deals for the month accounted for 81 percent of overall M&A deal values, valuing $387 million. Of these, $218 million came from the pharma, healthcare, and biotech sector followed by deals in the energy sector.

Meanwhile, private equity (PE) activity saw 76 deals valued at $4.5 billion. The funding winter continued to cause a 45 percent decline in investment volumes. While the start-up sector continued to drive the volumes drawing investors' attention towards innovation and tech.

The report noted that traditional sectors like pharma, energy, and banking garnered large cheques driving the investment values for the month. Driven by Temasek’s $2 billion investment in Manipal Health Enterprise, the largest deal in the Indian healthcare industry, the pharma, healthcare, and biotech sector dominated the PE deal values. This deal alone accounted for 45 percent of the PE deal values for the month.

"Global macroeconomic factors, turmoil in the banking sector in the US and Euro zone, fall in the price of commodities, specifically crude oil price continues to dampen the deal activity. However, domestic M&A deal-making continues to be resilient backed by continued strong domestic demand. We may also expect to see an uptick in PE activity in the coming months on the back of start-ups’ focus on profitability, resulting in investors turning bullish on select pockets of the Indian market," said Shanthi Vijetha, Partner, Growth, Grant Thornton Bharat.