Private Equity activity lowest in eight quarters in Q1
It recorded only 256 deals worth $5.3 billion, which is the lowest in the last eight quarters, according to the deal tracker report by Grant Thornton Bharat.
BENGALURU: The funding winter, which started a few quarters ago, has continued in the first three months of this year as private equity (PE) witnessed a 42% decline in volumes and 44% in values compared to the same quarter the previous year.
It recorded only 256 deals worth USD 5.3 billion, which is the lowest in the last eight quarters, according to the deal tracker report by Grant Thornton Bharat. The Silicon Valley Bank collapse and the US market had a spillover effect on the deal market in India as investors adopted a cautious approach and slowed their investments.
Also, Q1, 2023, recorded 332 deals valuing $9.7 billion, which is a 46% decline in volumes and a 35% decline in values, on the back of heightened volatility in global markets. The report added that compared to Q4, 2022, deal values and volumes in Q1, 2023, recorded a 16% decline each.
The deal values in the last quarter of 2022 were driven by Biocon’s acquisition of Viatris Inc worth $3.3 billion along with 14 other high-value transactions of $100 million and above amounting to $7.9 billion compared to 17 such deals recorded in Q1, 2023, driven by Suraksha Realty’s acquisition of Jaypee Infratech for $2.5 billion.
In the case of mergers and acquisitions, 76 deals worth $4.4 billion were recorded. This was 56% lower in volumes and 21% decline in values over Q1 2022. The decline in deal volumes was majorly contributed by a 62% fall in domestic activity recording the third-lowest quarterly deal volumes for any given quarter since 2011, the report added.
Shanthi Vijetha, Partner- Growth at Grant Thornton Bharat, said, “Q1 2023 witnessed a significant decline in the deals landscape compared to Q1 2022. The global developments appear to have dampened the deal activity of the domestic players, however, it seems to be temporary as the pre-deal activity picked up in March/ April.”
The start-up sector continued to lead the deal activity in Q1 2023 with 22% of the deals for the quarter. However, this was 71% lower than the deal activity witnessed in this sector in Q1 2022 recording only 17 deals valued at $69 million.
March 2023 recorded 98 deals amounting to $5.2 billion
Q1, 2023, recorded 332 deals valuing $9.7 billion
Q1, 2023, witnessed 4 IPO issues raising $84.4 million
M&A activity recorded 76 deals worth $4.4 billion
PE activity witnessed a declining trend, by 42% (volumes) and 44% (values)