Trade activity in India halves to $4.1 billion in August; 40% volume drop

Business activity in India halved to $4.1 billion in value in August 2022 and saw a year-on-year decline of around 40% in volume, according to a report by the consultancy. council Grant Thornton Bharat. He added that month-on-month August deal volume of 131 deals was 23% lower, but value more than doubled due to two deals valued at over $1 billion. dollars.

“The downward trend in trading activity appears to be due to the cautious approach of buyers and investors in committing large amounts of capital, given the global macroeconomic scenario and capital market conditions. Hence the “Absence of large ticket deals. Deal activity is instead dominated by start-ups, where ticket sizes are small,” Grant Thornton said in the report.

He added that mergers and acquisitions (M&A) deal activity was down from July 2022 and August 2021 and deal value, by contrast, was $1.5 billion (up 79 % compared to August 2021), driven by the acquisition of JSW Energy. Mytrah Energy’s 1.75 GW renewable portfolio for $1.3 billion.

M&A deal activity, which is dominated by domestic consolidations, was down 43% from August 2021, recording 21 deals. It is also the lowest monthly volume recorded in the past 22 months. As a result, overall M&A volumes were the lowest monthly numbers on record after 17 deals recorded in April and May 2020 (due to COVID-19), according to the report.

“The downward trend in deal activity appears to be due to the cautious approach of buyers and investors in committing significant capital, given the global macroeconomic scenario and capital market conditions,” said his partner Shanthi Vijeta. Deal activity appears weaker in part due to non-disclosure of values ​​in most merger and acquisition deals, Vijetha added.

Private equity (PE) deals recorded 110 deals with $2.5 billion in funds and continued to account for more than 84% of overall deal activity and 62% of deal value for the month. However, volumes and values ​​were down significantly from August 2021, which saw record monthly values ​​and the second highest volumes on 18 high-value investments of $100 million each.

The start-up sector continued to drive PE deal volumes in August, with a 64% share of PE volumes and the investment value was $300 million, he said.

“Year-to-date 2022, transaction volume has grown 15%, with values ​​nearly doubling to $110 billion. While private equity deal volumes contributed to the overall increase in deal volumes, deal values ​​were driven by billion-dollar M&A deals. Year-to-date M&A deal volumes recorded the highest volumes since 2015 and record year-to-date values. While year-to-date PE investments have seen record volumes, investment values ​​have seen a 13% decline due to the reduction in large investments between $100 million and $999 million,” adds The report.

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