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April 2022 witnessed HDFC Bank buying its biggest shareholder in a USD 40 billion deal, making it the country's biggest ever deal
Delhi: Geopolitical instability and new bottlenecks in global supply chains are top risks to both global and domestic economies. According to Grant Thornton Bharat Dealtracker Report April 2022, despite these setbacks, India Inc has not slowed down and has recorded 183 deals aggregating to USD 46.3 billion. The month also witnessed India's largest private lender, HDFC Bank, buying its biggest shareholder in a USD 40 billion deal, creating a financial services behemoth. Start-up, IT, banking and media sectors dominated the deal activity, both in the M&A and PE segment, in terms of both deal volumes and values.
Commenting on the deal activity, Shanthi Vijetha, Partner- Growth at Grant Thornton Bharat said, “While the geopolitical concerns and rising global inflation could likely cloud the near-term growth prospects, various domestic macro factors such as tax revenue growth, improvement in consumption and industrial high frequency indicators, etc. remain supportive of the economic growth and positive news for deal making.”
Mergers and acquisitions (M&A) landscape: The HDFC deal inflated the deal values for the month of April with the month witnessing over 676% increase in the M&A deal values, recorded across 45 deals. Deal volumes witnessed a 7% increase as compared to April 2021, while values jumped over 7 times. Barring the USD 40 billion deal (HDFC merger), the values recorded 50% fall over April 2021. Both cross-border deal volumes (100%) and deal values (403%) saw significant growth compared to same period last year. With 35% of M&A deal volumes, the start-up sector continued to dominate M&A deal activity with 16 deals valued at USD 76 million. The retail-tech and enterprise application and infrastructure segment led the sector volumes with 25% each, followed by fintech with three deals.
Private equity (PE) landscape: Private equity investments recorded USD 3.6 billion across 138 deals. While the values dropped by 52% compared to April 2021, owing to absence of big-ticket investments, volumes recorded 16% increase. The month witnessed largest funding round by an Indian company this year with Dailyhunt’s parent raising USD 805 million. The start-up sector continued to drive the PE deal volumes for April 2022 with 71% share of PE volumes with investment values of USD 0.9 billion. The fintech segment led the investment volumes in the start-up sector with 19%, followed by retail tech with 16% and enterprise application and infrastructure 11%. The month witnessed eight high value investments of USD 100 million and above across five distinct sectors ranging from media, banking, e-commerce, start-up and real estate.
IPO and QIP landscape: YTD 2022 recorded nine initial public offerings (IPO) with an issue size of USD 2 billion compared to 18 IPOs issues, raising USD 2.9 billion in YTD 2021. Similarly, Qualified institutional placement (QIP), on the other hand, saw six issues raising USD 671 million compared to 14 issues raising USD 3 billion in the same period last year.