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With improvements in industrial indicators and external demand, Grant Thornton Bharat- Deal Tracker states that tech/IT and start-up sectors continue to dominate deal activities

New Delhi, NFAPost: It was an august month for India Inc. as it witnessed 219 deals aggregating to $8.4 billion, record volumes for any given month since 2005, states Grant Thornton Bharat- Deal Tracker report.

While the volumes have almost doubled, compared with August 2020, transaction values jumped by 5.8x times driven by over 13x increase in the PE investment values.

Grant Thornton Bharat Partner, Growth, Shanthi Vijetha said domestic consolidation led to 68% of the deal volumes in merger and acquisition (M&A).

“Unicorns, such as Byju’s, Unacademy and Dream Sports sealed some of the M&A deals. 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,” said Shanthi Vijetha.

August 2021 witnessed a total M&A transaction value at $867 million across 37 deals, as opposed to August 2020 that witnessed 30 transactions with values aggregating to $908 million.

Private equity and venture capital firms recorded 182 deals, valued at $7.6 billion 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.

Technology and start-ups rule the roost

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.

The month also saw the birth of seven new unicorns. This trend indicates that both, the fund inflow and start-ups with a valuation of USD 1 billion, are likely to continue to grow and expand through the year.

Indian start-up ecosystem witnessed fund inflow of USD 1.4 billion, as reflected by the positive funding momentum with 115 deals (63% share of the PE volumes). With this, the sector topped both the volume and values chart for the month.

August 2021 vs. July 2021

August 2021 witnessed a surge in deal activity at 219 deals with 21% hike compared to July 2021, however, deal values on the hand dropped by 36% on the back of a 6x drop in the M&A deal values. While August 2021 recorded one deal in the billion-dollar category and 21 deals valued at and over USD 100 million, July 2021 recorded two and 22 such deals, respectively.

The year so far 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% of the total deal values in 2021.

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