The Indian tech sector recorded deals worth $635 million during the July-September 2024 period, marking a 31 percent increase in value year-on-year, according to a report released on Friday.
The Q3 Dealtracker report by consultancy firm Grant Thornton Bharat highlighted that while this quarter saw the highest deal volume since Q2 2023, it also represented the lowest deal activity of 2024, indicating a trend toward more strategic investments rather than large-scale acquisitions.
Raja Lahiri, a partner at Grant Thornton Bharat, noted that the recent interest rate cut by the US Federal Reserve, combined with India’s post-election stability, has invigorated the deal landscape, leading to significant growth in both value and volume.
“With the elections behind us, we observed an uptick in deal activity in terms of both volume and value compared to the previous quarter. Q3 2024 recorded 79 deals worth $635 million, which is a 5 percent increase in volume and a 31 percent rise in value,” he stated.
Of the total deals, 12 were valued at $20 million or more, according to the report.
Mergers and Acquisitions (M&A) activity saw a resurgence following a notable decline in Q1 2024, increasing by 44 percent sequentially to 26 deals in Q3 2024. The value of M&A transactions soared by 205 percent to $116 million, up from $38 million in Q2.
While M&A volumes rose by 53 percent year-on-year, the value saw a dramatic 89 percent drop, reflecting a lack of high-value deals. Additionally, the report mentioned that nearly 65 percent of transactions did not disclose their deal values, contributing to the overall decline in valuation.
“Investors remain optimistic about the Indian market. India has been a key recipient of capital inflows,” Lahiri remarked, adding that the upcoming influx of IPOs is expected to boost investor confidence regarding exit opportunities.
With some investors anticipated to achieve significant exits from these IPOs, they should have sufficient capital to make new investments, even after returning a portion to their Limited Partners (LPs), he noted.
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