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News - August 11, 2021

Indian startups push monthly deal volume in July to highest in 16 years

The Indian ecosystem saw a surge in merger and acquisition (M&A) and private equity deals as startup deals saw an uptick in July, according to a Grant Thornton report. Indian startups logged the highest deal volume for any given month since 2005, with 109 deals amounting to US$1.6 billion, the report found.

Ecommerce firms were also the second highest in terms of deal volume during the month. In addition, several startups including Paytm, Nykaa, and Ola signaled their plans for initial public offerings.

“This surge in deal activity was primarily due to companies continuing to borrow economically and spending their cash reserves on transformative deals to reposition themselves for the post-Covid-19 world. We hope the deal trend will remain positive in the coming months too,” said Shanthi Vijetha, a partner at Grant Thornton Bharat.

There have been 10 M&A and private equity deals worth US$1 billion and 81 deals valued at and above US$100 million in India so far this year. Taken together, these high-value deals accounted for 84% of the total deal values. This year has also seen the minting of 22 unicorns to date, supporting the increase in the deal values.

India clocked 181 deals amounting to US$13.2 billion – a 66% year-on-year increase in deal volumes and a 3% jump in the deal values.

There were 36 M&A deals worth US$5.6 billion in July this year. While M&A volumes were up by 13%, deal values declined by 37% from July 2020, mainly due to the shortfall in big-ticket transactions.

There were 145 deals valued at US$7.5 billion in the private equity and venture capital investments segment.