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Analyzing the top M&A trends in India for the first half of 2024 could be observed that it falls into a phase of growth and decline. The total deal value thus recorded a marginal growth of 4.4%, reaching US$37. 3 billion, which suggests potential for big transactions something that has not been seen in the last few years. However, this positive trend is accompanied by what we consider to be an 18.4% decline in the volume of mergers and acquisitions, pointing to a decrease in the dynamics in the mid-market segment.
Interestingly, this trend is not limited to overall corporate and investment banking; overall fee incomes were down even whilst ECM underwriting fees spiked. The initial six months of calendar year 2024 are quite positively orienting with the indicators of high-profile mergers and booming equity capital market revealing the changing financial and investment India. The more detailed decomposition of this period highlights the dynamic relationship between growth in total deal values and decline in total deal numbers that characterize the Indian economic and investment environment.
The contribution of mergers and acquisitions (M&A) deals in India in the first half of 2024 was quite volatile. Total deal value increased but, the number of transactions grouped under this classification reduced from that of the previous year. This trend is also well seen in the investment banking sector in the region where overall fees were down while ECM underwriting fees for instance were up.
It pointed as well that up for the first half of the year 2024 the combined value of all announced M&A transactions to and from India amounted to US$37.3 billion, with a 4. 4% year-on-year increase. But still, the quantity of the deals declined by 18. 4%. More notably, there was a significant drop in the mid-market deals worth up to US$500 million; the given deals’ count fell by 19%, and the velocity is the lowest since early 2021.
Nevertheless, it is understood that there were voluminous transactions bilingual by necessary implication. At least six of the deals completed during the period totaled over $1 billion, with the biggest at US$3.1 Billion deal between Walt Disney and Reliance Industries’ media division, and the $3. 0 billion merger deal for the Data Infrastructure Trust with ATC India.
Domestic M&A: $17. 2 billion (8. 8% year-on-year) — This has slightly decreased consolidation in India.
Inbound M&A: $17. 2 billion (an increase of 32. 4% year on year) — This increase has been attributed to more foreign investors among them from America.
Outbound M&A: $2. 7 billion (down by 29. 0% year-on-year) — This may be attributed to what appears to be a relative wariness by Indian companies to undertake overseas acquisitions.
The overall outbound deals to the TMT industries alone were worth $14 billion, nearly double those of the previous year. This points to a solid economic base within the country and increased appeal of the Indian technology market.
1. The Walt Disney Company and Reliance Industries Media Assets Acquisition — US$3. 1 billion
2. Data Infrastructure Trust / ATC India Merger – US$3. 0 billion
3. Large TMT Deals — a total of US$14 billion
IT and TMT were the primary sectors that were visible, key deals of which included Tata Sons’ acquisition of Star India and ATC Telecom Infrastructure, the number of international parties involved in domestic transactions is on the rise and this is an indication that the international players have developed interest in the country.
Stone wakes up to the fact that a boom in fundraising is largely due to increased financial efficiency in charity organizations. India has recorded exceptional even rapid growth in its equity capital markets especially in the first half of 2024. In the last decade, firms floated a record US$29. 5 billion, which has almost tripled the amount from the same period in the previous year. This boom was, however, triggered by a fairly dramatic rise in follow-on offerings (FPOs) and block trades.
FPO proceeds more than tripled, to 156%, while block trades raised US$16. 4 billion, up from almost 1. 85 billion, a growth rate of 117 percent. IPOs also came up with an increased number and Indian companies managed to mobilize US$4. 4 billion, an increase of 98% from the previous year.
It has been a mixed bag for Aids Orphans International; though it has received increased recognition from funding organizations, political activist Hary Tanoendah has accused the organization of trying to weaken or destroy the United Democratic Alliance.
The industry-wide fee pool in investment banking, a measure of the market share that banks get by advising on and underwriting issues, fell 11% compared to the first half of the calendar year 2023. However, the underwriting fees related to ECM doubled and hit their peak in 2007 with an increase of 127 percent. This has helped to capture the level of activity in equity capital markets to further extend the previous results. Other segments, including Debt Capital Markets (DCM), syndicated lending, and M&A advisory, saw significant fee declines:
Total Fees: $530.4 million (with a year-on-year decline of 11%).
ECM Underwriting Fees: It generated, on average, US$243. 8 million (up 127% year-on-year)
DCM Underwriting Fees: US$114.9 million (it was reduced to 22 million a year ago).
Syndicated Lending Fees: More than US$80. 8 million (51% down on the year)
M&A Advisory Fees: US$90. 8 million (down 47% year-on-year).
The investment banking sector’s leader in investment was Kotak Mahindra Bank at US$40. 6 million in fees will be realized and there will be a 7.6% market share.
High-tech deals dominated the landscape, with US$5.8 billion, a 13.2% increase year over year. Next were the industrials at US$5.0 billion, down 26.1%, as financials had an 11.9% market share. On the growing end were the telecommunication media & entertainment sectors both posting triple-digit percentage increases.
Deal value for private equity-backed M&A in India reached US$5.7 billion, a drop of 33.7% compared with the same period last year and the lowest first-half total since 2020.
As India is caught in the middle of these mixed results, so is this trend in M&A and the investment banking landscape a manifestation of both challenges and opportunities in an evolving economic landscape.
Therefore, it cannot be said that the first half of the year 2024 has seen a good or a bad performance across the India M&A review and investment banking industry. The total proposed deal value was lower by 2. 6 percent compared to the same period of the previous year; however, the local total deals were down by a third, and mid-market deals by half, showing that there was a slowdown in dealmaking.
On the other hand, the ECM has blossomed, especially in Fund Raising Exercises with record fund mobilization and a significant increase in ECM underwriting fees. This is testimony to general trends in Indian money markets where a vibrant equity market and large value stock trading are already evident, even as fee-based deal-making and volumes slip. Thus, based on these market changes and as India remains a favorable recipient of foreign direct investments, M&A and investment banking trends and changes remain important factors for defining the further dynamics of the Indian economy and its markets.
Some notable deals include the $3.1 billion merger between Walt Disney and Reliance Industries' media assets and the $3.0 billion merger between Data Infrastructure Trust and ATC India.
The total deal value in the tech sector reached $14 billion, more than double compared to the same period last year.
M&A activity saw a slight increase in deal value but a significant decline in the number of deals, particularly in the mid-market segment.
The Technology, Media & Entertainment, and Telecommunications (TMT) sectors experienced substantial growth, with a notable increase in deal value.
How did inbound and outbound M&A activity compare in the first half of 2024?
Inbound M&A activity saw a 32.4% increase year-on-year, reflecting higher foreign investor interest, while outbound M&A activity declined by 29.0%.
Private equity-backed M&A deals totaled $5.7 billion, a 33.7% decrease from the previous year.
How did the equity capital markets perform in the first half of 2024?
The equity capital markets experienced record-breaking fundraising, with companies raising $29.5 billion, driven by a surge in follow-on offerings and block trades.
Overall investment banking fees declined by 11%, though ECM underwriting fees surged by 127%, indicating a strong equity capital market performance.
ECM underwriting fees saw the highest growth, up 127%, reflecting increased activity in the equity capital markets.
Apart from technology, significant M&A activity was observed in the Media & Entertainment and Telecommunications sectors, with triple-digit percentage growth in deals.
