In 2024, India experienced a wave of important business mergers and acquisitions that transformed its business environment. Key transactions involved Reliance Industries' purchase of Future Group, Bharti Global and BT Group plc, Tata Consumer Products Ltd and Capital Foods. These mergers and acquisitions demonstrate the vibrant state of India's economy, propelled by industries such as technology, renewable energy, and financial services.
These deals not only showcase the confidence of investors but also highlight the strategic efforts of companies to strengthen their position in the market and operational efficiency. The merger and acquisition activity this year has laid the groundwork for significant growth and innovation within the Indian business landscape.
India surprised all by the resiliency of its M&A market in which trends far outshined those of other Asia Pacific nations. The cumulated values of deals in India rose 66 per cent in the first nine months of 2024 compared to the same period last year, according to a report the Boston Consulting Group released on October 16, 2024. Strong growth came from high-value deals. This comparison, where the value of deals rose only 10% while Asia-Pacific slipped 5% in this period, singles out and indicates that India performed more robustly within the global M&A landscape.
Deals declined 3% in India but relatively modestly compared with the volumes of deals declining across the global and Asia-Pacific markets, at 13%. This puts India as an attractive source of high-value M&A activity, though deal volumes have marginally decreased. Evidence of market recovery in the country has reflected its endurance value for strategic buyers and investors at times of global economic uncertainty.
Retail and Consumer: It was the biggest sector in terms of volume aggregation. Volumes here declined by 7%. Deal value in this sector increased 18% from the last quarter. The volume share of Textiles, apparel, and accessories was 28% of the overall volumes here, at $370 million. E-commerce accounted for 69% of the overall deal value at 20 deals worth $1.4 billion.
IT & ITes Sector: It accounted for 16% of the deals in the quarter with volumes modestly increasing to 9%. Deal values decreased and average deal sizes had a downfall from Q1 2024 US$10.9 million to Q2 2024 US$9.7 million. Tech startups were the front-runners in that line and grabbed 47% of the deal volumes and 36% of the deal values.
Pharma, Healthcare, and Biotech Sector: Q2 2023 saw the pharma, healthcare, and biotech sector grab the top spot in terms of value at $3.8 billion across 53 deals. Ten high-value deals comprise around 86% of that value in the sector. The sector was driven by health tech volume, while the value of 28% was due to medical devices.
Manufacturing: The volumes of the manufacturing sector accounted for 28% and were one of those sectors as the values of the deals improved ninefold to US$3.5 billion. This is mainly because three multi-billion-dollar deals valued more than US$500 million by the Adani Group in the industrial materials industry accounted for as much as 87% of the value of the sector. Similarly, the industrial materials sector also led in volumes at 41%.
Other Industries: Professional and business services, and the airlines industry was pretty lively in Q2 2024. The rest of the deal activity in this quarter was relatively subdued compared to Q1 2024. Other industries that had sizable increases in deal activity include agriculture, transportation and logistics, and real estate. Deal activity did decline in infrastructure management, education, hospitality, leisure and media, and entertainment, compared to the reported quarter.
The European Commission granted, in November last year, permission to the joint venture Star India, made by Reliance Industries Ltd and The Walt Disney Company with BTS Investment 1, with James Murdoch and Uday Shankar at the helm. It is part of what such industrial managers dream of: Star India is its real picture in the media landscape.
The resultant entity of Reliance's Viacom18 and Disney's Star India would give birth to India's biggest media and entertainment conglomerate, pegged at $8.5 billion. Assets would go to Star India; it would assume the business. Bodhi Tree Systems would have a share of 7%. A Reliance-owned company held the rest at 56%; the 37% was owned by Disney. More than 100 TV channels the two streaming services will be with the new company. Disney+ Hotstar has retained its rights over the streaming for the year 2025 for IPL.
Bharti Global, the international investment arm of Bharti Enterprises, said it would buy a 24.5% stake in BT Group plc from Altice UK, making it the biggest shareholder of the company – a position that at one time BT Group held in Bharti Airtel with a 21% holding. Bharti had already bought 9.9% of the UK's leading fixed and mobile communications provider in a market deal. The $4 billion deal will wait for the regulatory and security approvals.
This was yet another milestone representing Bharti Airtel's commitment towards its expansions across the world and added itself to the list of premier British companies acquired by Indian entities, which comprises Jaguar Land Rover, Corus, Tetley, BSA, and Hamleys.
Major acquisition drive in 2024. The company acquired 100 per cent equity in Capital Foods for Rs 5,100 crores and that of Organic India for Rs 1,900 crores. Capital Foods ensured Tata Consumer company significantly enhanced its positions in categories that have sauces, chutneys and instant meals under 'Ching's Secret' and 'Smith & Jones.' The Organic India chain of organic teas and herbal products was brought under its fold by acquiring this; Fabindia had been a backer of it.
This strategic play is amplifying Tata's pan across high-growth, high-margin food segments, reinforcing its pantry platform and enhancing its presence in the domestic and international markets.
Data Infrastructure Trust's acquisition of ATC India Tower Corporation for $2.5 billion was turning into one of the swelling investments in telecom infrastructure through increasing demands of digital connectivity. One of the largest infrastructure deals concluded during 2024, it was managed by Data Infrastructure Trust.
The Indian industrial sector continues to be a significant contributor to the M&A space, even amid global uncertainty. For instance, ACC-Ambuja Cement acquired Penna Cement for US$1.3 billion, and this would help incorporate its infrastructure growth through the Adani Group.
M&As remain unrestricted in the healthcare sector, especially in local markets. The big-ticket deals include Mankind Pharma's US$1.6 billion acquisition of Bharat Serums & Vaccines, and by so doing, it became the market leader in women's health and fertility.
The trends that have emerged and are shaping M&A activity in India are as follows:
PE investments increased both in volumes and values: several 335 deals worth USD 8.7 billion were closed in Q2 2024. Volumes were up by 9% on quarter by comparison with Q1 2024, and values by 55% on quarter. Volume was the highest since Q2 2022, and values the second ever largest, with 21 big-value deals (values > USD 100 million) accounting for 68% of PE deal value.
These high-value deals are picking up, and these indicate that the firm investor strategy is shifting from firms that bring on board proven business models that generate sustainable revenue by satisfying the existing consumer demand.
On August 2024, India's Finance Ministry updated the Foreign Exchange Management (Non-debt Instruments) Rules 2019 to relax FDI conditions largely from the perspective of share swapping between Indian and foreign companies. The updates are designed to make mergers and acquisitions along with strategic moves easier for Indian firms when expanding across borders.
A great spurt was witnessed in niche deal flows in electric vehicles (EVs), industrial materials, pharma & biotech, energy & renewables, infrastructure, and defence sectors among others.
Reliance-Disney or Bharti Airtel's willingness to take a stake in BT Group represents growing investor confidence in the Indian market. Such deals open new avenues of opportunity-especially for markets like media, technology, and infrastructure.
Although general vagueness recedes, PE firms will be watchful because general vagueness is still solid across the world. Consequently, they are investing more vigilantly in industries where general vagueness is relatively minor that is, renewables.
Cross-border mergers result in larger bolder companies; this should lead to an expansion of IPOs, primarily in tech and media.
Besides the above, this creates new regulatory burdens seeking RBI and CCI approvals in India, thus further delaying both IPO and cross-border M and A activities.
E-commerce and fintech as emerging sectors offer a very attractive opportunity for private equity or venture capital investors through global acquisitions in India.
While weak outbound M&A activity has homegrown firms preferring strategic mergers overseas than old-fashioned IPOs, it gets pushed by uncertainty in world markets.
This year has been a key year for mergers and acquisitions in India. The value of deals has grown significantly, and investor interest remains strong. Despite global uncertainties, India has attracted high-value transactions, particularly in retail, IT, pharmaceuticals, and infrastructure. Major deals like Reliance's acquisition of Viacom18 and Bharti Airtel's investment in BT Group highlight India's rising appeal to both local and international investors. The evolving regulatory environment and more strategic mergers reinforce India's position in the global M&A landscape.
Looking ahead, M&A prospects for 2024-2025 are promising, driven by international interest and a supportive regulatory framework. However, private equity firms are being cautious and focusing on strong sectors like renewable energy. While IPO numbers are increasing, regulatory challenges may lead to delays. Additionally, changing market conditions suggest a shift toward strategic divestments. Indian companies are increasingly opting for mergers with international firms over traditional IPOs.