India’s Tech Sector Sees 3.8% Growth In Q1, Witnesses 67 Tech Deals Worth $648 Mn
India’s technology sector posted a growth of 3.8 per cent in FY2024 despite economic uncertainties. The first quarter of 2024 witnessed an uptick in deal flow, with an 18 per cent increase in volume and a striking 25 per cent surge in value compared to the previous quarter.
This surge, according to Grant Thornton Bharat, was fueled by M&A activities and reflects the industry’s ability to rebound amidst challenging circumstances.
According to Q1 data, the India Inc. saw 67 deals amounting to USD 648 million in the technology sector alone during the last quarter. There were five high-value deals, each exceeding USD 50 million, accounted for a substantial portion of the total deal activity, highlighting the industry's resilience and attractiveness to investors.
Despite a slowdown in funding and economic uncertainties, India's tech startup ecosystem continues to perform decently, securing the fourth-highest funding globally. Krutium AI emerged as one of the two unicorns in the first quarter, signaling the sector's potential for growth and innovation. Both M&A and private equity (PE) activities saw increased deal volumes, indicating sustained investor interest in the Indian tech landscape.
"India's tech landscape has proven its robustness, growing 3.8 per cent in FY2024, a testament to its endurance amid economic flux. The surge in Q1 deal flow, boasting an 18 per cent volume and 25 per cent value increase, signifies a bounce-back with M&A at the forefront. Anticipating favourable monetary shifts, we're gearing up for steady progress. Our strategic bets on AI and digital innovations position us to seize emerging prospects, steering us towards a dynamic FY25," said Raja Lahri, Partner & Technology Sector Leader, Grant Thornton Bharat.
Source: Grant Thornton Bharat's Q1 Technology Dealtracker
In terms of M&A, the first quarter of 2024 recorded 19 deals totaling USD 215 million, a 46 per cent increase in deal volumes and a 497 per cent rise in deal values compared to the previous quarter. Domestic consolidations accounted for a significant portion of deal volumes, while outbound transactions contributed substantially to deal values, particularly with US companies playing a leading role in outbound activities.
Private equity (PE) investments remained dominant in the tech sector, leading 72 per cent of total transaction volumes and contributing to 67 per cent of total sector values. The emergence of two unicorns, Krutium AI and Perfios Software, further shows the attractiveness of the Indian tech landscape to investors.
Additionally, the tech sector witnessed two IPOs totaling USD 110 million and three QIPs raising a total of USD 219 million.
