Recent Trends in Mergers and Acquisitions (M&A) in India

This Article explores the vibrant revival of India's M&A sector in 2024, focusing on the renewed activity and growth within the industry. Further, it highlights the key drivers behind the 

resurgence. Additionally, it also examines recent mergers and acquisitions in India. Analyzing these developments provides readers with a comprehensive understanding of how India's economic recovery is transforming the corporate mergers and acquisitions environment.

1. A brief overview of the M&A Activity in 2024

India's M&A activity displays significant signs of recovery in 2024, following a significant downturn in 2023. During January 2024 alone, M&A deals surged by 78%. This increase was driven by the telecommunications and industrial sectors. The manufacturing sector, particularly automotive, is expected to increase the number of deals in terms of volume in India. This growth is anticipated in the electric vehicles and manufacturing segments as India continues to proceed for 30% of all-electric vehicles by 2030.

2. M&A activities in India during Q1 CY 2024

The total volume witnessed 455 business deals, which signifies a robust growth in M&A activity in India. The total deals witnessed a 60% increase in Q1 CY 24 compared to Q4 CY 23. Further, USD 26 billion was the deal value, whereas USD 8.5 billion was the largest deal. In addition, the Reliance media companies have announced a merger with Disney India.

3. M&A Activity in India during Q2 of CY 2024

The total deal volume during this quarter witnessed 470 deals worth USD 15.9 billion. It reflects a 9% increase in deal volume, but the quarter also witnessed a 23% decline in deal value.

Adani Group announced multiple high-volume deals in the industrial materials and ports sectors. It led to a surge in the deal volume compared to the previous quarter. Further, the pharmaceutical and manufacturing sector recorded the highest values, contributing 48% of India's overall deal value.

4. Notable Transactions in M&A during CY 2024

The latest mergers and acquisitions in India that were noticed during this CY are as follows: -

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• Ambuja Cement acquired a 100% stake in Penna Cements Industries Ltd. The deal value amounted to USD 1,256 million in the manufacturing sector.
• Adani Group increased its stake in Ambuja Cement Ltd and ACC Ltd by 70%. The deal value amounted to USD 997 million.
• Dr. Reddy's Laboratories Ltd has a 100% acquisition stake in Haleon Plc- NorthStar Switzerland SARL. The deal value was USD 803 million in the Pharmaceutical and healthcare sector.
• Data Infrastructure Trust acquisition of ATC India Tower for USD 2.526 during Q1 of 2024.
• Sequoia Capital Operations acquisition of Walton Street India Investment Advisors for USD 1,500 million.
• Cohance Lifesciences merged with Suven Pharmaceuticals for USD 1.02 billion in the pharmaceutical sector.
• Zurich Insurance Company Ltd acquired a 70% stake in Kotak General Insurance Company Ltd for USD 670 million in the insurance sector.
• Tata Consumer Products Ltd acquired a 100% stake in Organic India Pvt Ltd for USD 229 million in the retail and consumer sector.
• Tata Consumer Products Ltd 100% acquisition of Capital Foods Pvt Ltd in the Retail and Consumer sector.

5. Inbound M& A

In the first half of 2024, India witnessed a remarkable increase in inbound M&A. The total value of announced deals is approximately USD 25.6 billion, marking a 24% increase in 2023. The total deal value for the first quarter was 455 transactions, and this growth is significant given the global economic slowdown and geopolitical uncertainties. The technology sector, which is fuelled by digital transformation, continues to be a major driver as India progresses towards digitalisation. Further, the second half of 2024 is expected to witness a surge in inbound M&A activity. Investor confidence is at its peak owing to the overall friendly investment climate, that India currently possesses.

6. A Brief Overview of the Private Equity (PE) deals in India during 2024

The PE sector witnessed 335 deals totalling 8.7 billion, with equity players mostly investing in health care, financial services, consumer retail, and infrastructure.  There was a 9% increase in volume and a 55% increase in value compared to the Q 1 of 2024. The CY 2024 witnessed that the PE activity was considerably noticed in expenditure and in the healthcare sector. Further, in real estate, the PE investments reached USD 3 billion in the first half of 2024. May 2024 witnessed 16 large deals worth USD 5.6 billion, marking a 61% increase compared to May 2024.

    7.  Notable Transactions in PE during CY 24

• Brookfield India Real Estate Trust, a 50% stake in Bharti Enterprises Ltd in the Real Estate sector for USD 723 million.
• Advent International's investment in Appollo Health Co Ltd, in the Pharma, healthcare, and biotech sector of USD  298 million.
• Highways Infrastructure Trust 100 5 stake in PNC Infotech Limited- 12 highway assets in the infrastructure and management sector for a staggering USD 1090 million.
• GOG Partners invested USD 710 million in a 0.8% stake in Bharti Airtel Ltd in the telecom sector.
• Abu Dhabi Investment Authority (ADIA) and investment management company KKR invested in Reliance Retail Ventures Limited (RRVL) warehousing assets for a transaction value of USD 1.5 billion.
• The technology sector, mainly health, fintech, and real estate, accounted for 69 deals worth USD 253 million in January 2024. It displays a positive trend for investors for innovative and scalable business models. As the year progresses, a vibrant startup ecosystem is likely to sustain the momentum, positioning India as a key player in the global private equity landscape.

  Conclusion

The recent M&A trends in India indicate a dynamic market landscape as we progress through 2024. The notable increase in deal value is witnessed despite fluctuations in deal volume. Key sectors, such as pharmaceuticals, manufacturing, and technology, have emerged as significant contributors to this activity. Further, the PE investment landscape has shown resilience, with a shift in the residential and warehousing sector. As the economy continues to grow, PE will play a crucial role in further development and innovation across industries in India.

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