Deal activity witnessed a handsome growth in August at USD 8.4 billion, on the back of a healthy jump both in volumes and sizes, a report said on Monday. There were 219 deals during the month, which was the highest since 2005, and double that of the year-ago August 2020 period when the country was coming out of a national lockdown, consultancy firm Grant Thornton Bharat said.
However, when compared with the preceding month of July, the transaction activity shows mixed results. Deals were up 21 per cent by volume, but lower by 36 per cent in values on the back of a six-times drop in merger and acquisition (M&A) activity, the report said.
A bulk of the deals in August came from private equity and venture capital funds, who invested USD 7.6 billion across 182 deals driven mainly by high value investments in Indian companies and unicorns, supported by confidence in recovery, lucrative opportunities in the start-up space and promising entrepreneurial talent, it said.
“As improvement in industrial indicators and external demand unfold, we hope economic activities would normalise in the coming months driven by pent-up demand, ongoing vaccination drive, support from policy mix and a resurgence in global growth,” its partner Shanthi Vijetha said.
August saw total M&A transaction value at USD 867 million across 37 deals, as opposed to August 2020 that witnessed 30 transactions with values aggregating to USD 908 million, it said, pointing that unicorns such as Byju’s, Unacademy and Dream Sports sealed some of them.
The star sector of the month continued to be tech, followed by education, pharmaceutical and energy sectors. The bulk of the deals were in IT solutions, data analytics, cleantech, pharmaceuticals, e-commerce, consumer retail, digital healthcare, fin-tech and ed-tech companies, whose products and services have seen strong demand during the pandemic, it said.
Seven startups achieved unicorn status during August, which indicates that both the fund inflow is likely to continue to grow through the year. Indian start-up ecosystem alone witnessed fund inflow of USD 1.4 billion in 115 deals (63 per cent share of the PE volumes).
The year so far has witnessed 11 deals in the billion-dollar category and 102 deals valued at and above USD 100 million. These high value deals together accounted for 84 per cent of the total deal values in 2021, it said.