In the Indian dealmaking landscape in the financial year (FY) 2024, the number of deals and their total value decreased by one-third compared to FY2023, according to a 360 One Wealth and Vccedge report.
However, the India Invests report for FY24 stated that the Indian dealmaking landscape in 2024 remained robust, with an average of three private investment deals being finalised daily.
Talking about M&A activity in India, the report stated that it fell sharply in FY24 as the cost of capital remained high due to a tight interest rate scenario worldwide and as macroeconomic uncertainties weighed. The total value sank 69 per cent from FY23, mainly due to the distortionary effect of the monumental mega-merger between HDFC and HDFC Bank.
Telangana was upstaged by Tamil Nadu in M&A deal activity, claiming the fifth spot, and surpassed Delhi in value to secure the fourth rank. Maharashtra retained its lead in both volume and value. Haryana surpassed Karnataka in M&A value.
According to the report, Mumbai and Delhi-NCR remained primary hubs, with Bengaluru ranking third. Chennai emerged, matching Pune in volume and surpassing it in value.
Almost all sectors within the startup domain were affected this year. The number of deals in HR tech, prop-tech, edtech, health tech, and travel tech halved. Fintech, media tech, and agritech also experienced a sharp deceleration in activity.
On the other hand, logistics tech stood out, maintaining the same level of activity. Aggregate funding to logistics-tech ventures nearly doubled this year, it added.
In terms of deal value, both public market deals and pre-IPO deals nearly reached previous highs, signalling resilience in the segments. However, early-stage startup dealmaking took a significant hit, with both angel/seed deals and VC deals decreasing by nearly 29 per cent each, in FY24.
Although deal activity slowed down, the median value of transactions improved, surpassing the previous peak seen during the investment rush in FY22. Similarly, the average value remained strong, exceeding the pre-pandemic level. This indicates that companies continued to attract significant investments from private investors.
Maharashtra surpassed Karnataka in total investment inflow and the number of deals, with Mumbai leading the way. Delhi-NCR remained a key hub, while Bengaluru saw a drop in the deal volume. Chennai rose to the fourth spot, replacing Pune. Old economy sectors attracted more investors amidst the struggles of the new economy.
Anirudha Taparia, Co-founder and Joint CEO, 360 One Wealth said, “The global forecast for private capital in 2024 shows a notable optimism stemming from a more stabilized investment landscape. We expect a gradual uptick in mergers and acquisitions activity during FY25. With an exit value of USD 9.5 billion, open market transactions doubled, presenting opportunities for buyers and sellers and becoming the primary driver of exits for alternative investors.”
Taparia added that investment via bridge funding surged by over 50 per cent, even as early, growth and late-stage funds saw their total funding amounts halving in FY24.
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