Number of M&A deals in India falls 10% to 793 in 2023: PwC

The number of merger and acquisition (M&A) deals during 2023 dropped by 10 per cent on an annual basis to 793, said a PwC India report on Sunday.

However, the total disclosed deal value for M&A declined much steeper at 38 per cent during the year, according to the report titled 'Deals at a glance'. The report further observed that PE (Private Equity) investments totalled USD 36 billion, marking a substantial 36 per cent drop from 2022.

Despite this decline, the average investment size per deal increased to USD 46 million from USD 42 million in 2022, reflecting a potential shift towards larger opportunities.

While early-stage investments were 53 per cent less compared to that in 2022, the report said, these along with growth-stage investments continued to make up the major share, constituting around 73 per cent of fundings in 2023. On the other hand, buyouts demonstrated resilience with only a 5 per cent decline compared to 2022.

This suggests a nuanced landscape, where investors show interest in diverse strategies and larger-scale ventures, even amid an overall decrease in PE investments, the report said.

"In 2023, India resiliently navigated global headwinds, solidifying its appeal to international investors. The economic fundamentals stay strong reflecting investor enthusiasm for the country's expanding economic opportunities and this optimism is also echoed in PwC's latest CEO Survey.

Despite a restrained deal-making environment throughout the year, the deal activity stabilised towards the last quarter leading us to anticipate an upswing in 2024," said Dinesh Arora, Partner & Leader Deals, PwC India.

In calendar year 2023, PwC said the retail and consumer sector emerged as the most active sector with technology finishing up marginally behind for the second consecutive year.

Following closely were the professional services and fintech sectors, which exhibited high activity in terms of volume. Meanwhile, financial services, renewable power, and healthcare dominated in deal value.

Top 10 deals of 2023 included JV buyouts, strategic investments, PE buyouts, and stock mergers and contributed 21 per cent of the total deal value. While PE deals were higher in volume overall, strategic deals dominated the top deals with domestic deals and group-level consolidations as a significant theme, the report said.

PwC is a network of firms in 152 countries with over 3,27,000 people providing assurance, advisory and tax services.