41% decline in deal values in Indian market in October: Report

New Delhi: India saw 122 deals valued at $2.5 billion in October, a 41 per cent decline in deal values from the previous month, a report showed on Thursday.

Despite a decline in deal values, primarily due to the absence of major M&A transactions, October showcased resilience with a 14 per cent increase in deal volumes.

High-value deals worth over $100 million dropped from nine in September to just four in October, with the total values decreasing from $3.7 billion to $2.2 million.

“While the absence of big-ticket transactions has affected deal values, the robust 101 private equity deals worth $1.9 billion reflect the ongoing opportunities in the market,” said Shanthi Vijetha, Partner, Growth Grant Thornton Bharat.

“With the festive season on and an anticipated surge in consumer demand, the economy and deal market are poised for an upbeat period, demonstrating the presence of diverse growth themes and opportunities amidst a challenging backdrop,” she added.

October continued to witness a downward trend in mergers and acquisitions (M&A) space with 21 deals amounting to $0.24 billion, marking a 19 per cent drop in volumes compared to the previous months.

Furthermore, the past two months have seen a substantial decline in deal values in M&A landscape, plummeting from $3.7 billion in August to $235 million in October, leading to a significant reduction in the average ticket size from $141 million in August to $75 million in September and a mere $11 million in the latest month.

The top deal in this space was the acquisition by Reliance Retail Ventures Ltd of Superdry Plc's licenses and brand assets in India, Sri Lanka, and Bangladesh, valued at $48 million.

The private equity landscape showed signs of vigour, with a total of 101 deals worth $1.9 billion.

Notably, the month was characterised by smaller-ticket PE investments, further reinforcing faith in the PE market. A standout deal in this space was the significant investment of $598 million made by the Abu Dhabi Investment Authority, which acquired a 0.6 per cent stake in Reliance Retail Ventures Ltd.

The market saw the launch of six IPOs, collectively raising a total of $546 million in capital.

The startup sector continued to be a dominant force, accounting for 60 deals, which represented nearly half of the overall deal activity, said the report.