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Tech savvy sectors like start-ups, IT and e-commerce topped the sector volume charts in 2021
Delhi: A recap of the year gone by, 2021 witnessed a record 2224 deals amounting to USD 115 billion according to the Annual Grant Thornton Bharat Dealtracker. The year also saw a jump of 867 deals worth USD 37 billion, from last year.
The year gone by recorded 499 deals worth USD 42.9 billion in the M&A segment, 1624 deals worth USD 48.2 billion in PE segment and 101 deals worth USD 23.9 billion in IPOs and QIPs. 2021 saw 14 deals valued at over a billion dollars each, 15 deals valued between USD 500 million and USD 999 million and 135 deals valued between USD 100 million and USD 499 million. While these deals accounted for only 8% of the total deal volumes, they constituted for 80% of values.
“2021 witnessed the second wave of COVID-19, highly transmissible Delta variant, thereby bringing the economy to a halt. However, considering the vaccination drives, government stimulus and incentives, consumer spending, re-opening of industries and sectors, better supply chain management and surge in tax collections, the domestic economy continued on its path to gradual recovery with focus on building sustainable strategies to withstand future uncertainties,” said Shanthi Vijetha, Partner, Grant Thornton Bharat.
M&A dealscape
M&A deals saw a strong 14% growth at USD 42 billion across 499 deals, 39% up from 2020. The surge in the values was largely supported by 10 deals recorded at and over USD 1 billion each. Further, the deal volumes also reached pre-covid levels, recording 13% growth over 2019 volumes. While outbound volumes were higher than inbound volumes, high value inbound deals pushed the cross-border deal values at USD 19.3 billion in 2021.
Domestic deal activity has been encouraging last year, with 76% of deal volumes dominating the domestic segment and 24% deal volumes in the cross-border segment. In the cross-border segment, 48% were inbound and 53% outbound. Inbound deal values were led by investments coming from Europe, while Asian countries garnered majority outbound values.
Banking and financial services, followed by IT & ITes industry, energy, and manufacturing sectors witnessed high-value transactions in 2021.
PE deals
PE investment values recorded USD 48.2 billion in 2021 marking the highest yearly values witnessed in any given year since 2011. This surge in the investment values is attributed to 112 high value investments of USD 100 million and above. Despite the stress around COVID-19 and other geopolitical tension continued from 2020, 2021 witnessed one and half times growth in the investment volumes compared with 2020, attracting a considerable portion of funding from overseas investors.
Start-ups claimed a major share in deal volumes at 66%, while e-commerce trumped in deal values with 32% share. Retail and consumer, education and pharma sectors remained active together constituting 9-10% of PE volumes. High-value investments were also witnessed in sectors such as IT, start-up, education, pharma etc.
IPOs and QIPs
2021 recorded 36 fund raises via qualified institutional placement (QIP) at USD 6.2 billion, marking the third highest fund raised via this route since 2011. This was majorly driven by four high value fundraise of over USD 500 million each. On the other hand, 65 companies raised USD 17.7 billion via Initial Public Offering (IPO), a 2.7x increase in issue size over 2020. This was record volumes and values till date.
Start-ups, e-commerce and IT sectors were the major deal drivers in 2021 both in terms of deal volumes and deal values. Banking, education, pharma, energy, manufacturing and aviation sectors also witnessed high value marquee deals during the year. The year 2021 also saw emergence of 33 unicorns.
Piramal Capital and Housing Finance Ltd receiving NCLT’s approval to acquire Dewan Housing Finance Corp. Ltd (DHFL) for USD 5.1 billion was the deal of the year in the M&A category. Walmart’s Indian e-commerce store Flipkart raising USD 3.6 billion in fresh funds was the deal of the year in the PE category.