Sunday, 29 January 2023 – Despite global headwinds, deal activity in India surpassed pre-COVID levels to reach USD 159 billion with 2103 transactions, a 29% increase from CY21 in terms of value as per the PwC India report titled, “Deals in India: Annual review 2022.” India demonstrated signs of a stable deals market overall, defying the trend among most major economies of the world.
Mergers and acquisitions (M&A) accounted for a major share of the deal value, boosted by more than 20 large transactions, and reached a record high of USD 107 billion – almost twice that of 2021. However, excluding the HDFC Ltd and HDFC Bank merger (worth USD 60 billion), M&A deal values were about 15% lower than that of 2021. Private equity (PE) investments stood at USD 52 billion, 22% lower than 2021 but 20% higher than all other preceding three years in terms of value and quantum.
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. 70% of deal activity in terms of value and volumes was witnessed in H1 2022, with only 30% activity in H2 2022.
Analysing deal activity in CY22, Dinesh Arora, Partner & Leader – Deals, PwC India, said, “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.”
Annual review of deals in India – A snapshot
Globally as well, overall deal volumes in 2022 were below the record-breaking 65,000 deals in 2021. However they remained 9% above pre-pandemic levels. As per PwC’s Global M&A Industry Trends: 2023 Outlook, the current market conditions suggest that we are in a sweet spot for M&A, provided that companies have well-thought-out strategies and the financial wherewithal to make transformational deals to contribute to their longer-term success.