India Inc witnessed 199 deals worth $3.5 billion in November, an 34% increase compared to November 2020, according to the Grant Thornton Bharat Dealtracker.
The number of mergers and acquisition (M&A) transactions in November’s total M&A transaction value stood at $436 million across 50 deals – values dropped significantly but there was a 19% year-on-year (y-o-y) increase in deal volumes.
While domestic growth remains on track as indicated by improving high-frequency indicators, some supply-side disruptions continued in a few sectors, the report stated.
November 2021’s total M&A volumes were driven by domestic consolidation, which constituted 86% of M&A volumes and 86% of M&A values. A large chunk - 68% - of M&A transactions, IT, startups, and e-commerce sectors dominated the segment, with 80% of values for the current month, and an aggregate value of $350 million.
“The absence of big-ticket transactions, partly owing to non-disclosure of deal values in the majority of M&A transactions (74% of deals) could be the reason for lower deal values. Deal activity continued to be primarily in the technology sector, including startups and e-commerce sectors. Better health of the banking system and supportive policy measures saw active deal-making in the financial sector, whereas resumption of economic activities and demand recovery benefitted consumer and retail sectors,” said Shanthi Vijetha, Partner at Grant Thornton Bharat.
Similar to the M&A deal trend, private equity (PE) investments saw a 41% increase in volume but a 26% drop in deal value, with $3.1 billion compared to $4.2 billion in the same month last year. The month witnessed eight high-value investments of above $100 million, constituting 64% of total PE values for the month compared to two deals valued at over $ 1 billion, and seven deals valued at over $100 million in November 2020.
In addition, for the second month in a row, Thrasio-style start-ups such as Globalbees and 10club, Evenflow brands, and UpScalio completed M&A transactions. During the month, companies such as Zomato, 10club, GlobalBees, Betterplace Safety Solutions, Easemytrip, and eBikeGo completed numerous deals in the start-up and IT sectors.
November saw the emergence of six new unicorns – Mensa Brands, Upstox; Curefit, Spinny, The Good Glamm Group and NoBroker. While the latest funding makes Mensa Brands Asia’s fastest firm to reach the unicorn status, the Good Glamm Group became India’s first direct to consumer beauty and personal care company to join the club; NoBroker at $1.01 billion valuation made the first proptech and real estate startup to achieve unicorn status.
Interestingly, November also witnessed media, agriculture and IT sectors garnering high-value investments of over $100 million.
Food delivery firm Zomato, which went public earlier this year, made a series of investments in startups as it looks for ways to inorganically expand its business.
Zomato invested $75 million in Shiprocket. The investment is part of a $185 million financing round. The investment values Shiprocket at over $930 million. In Magicpin, Zomato invested $50 million to acquire a 16% stake. The company also sold its fitness service Fitso to Curefit for $50 million for a stake in the Bengaluru -based startup and also invested an additional $50 million in the firm. In total, Zomato is gaining a 6.4% stake in Curefit, creating another unicorn in the country.
Zomato’s investment in these companies comes at a time when it has decided to shut down its grocery and nutraceutical verticals, to focus on its core business around food deliveries. Having already pumped in $275 million in Indian startups, Zomato is looking at deploying an additional $1 billion within the next two years, the report said.