Indian tech sector witnessed deals worth $635 million in the July-September period of 2024, registering a 31% increase in value year-on-year, according to a report released on Friday.
Consultancy firm Grant Thornton Bharat's Q3 Dealtracker report for the tech sector said the quarter witnessed the highest deal volumes since the second quarter of 2023 but the lowest for the year 2024, reflecting more strategic investments rather than large-scale acquisitions.
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Grant Thornton Bharat Partner Raja Lahiri said the recent interest rate cut by the US Fed, coupled with India's post-election stability, has infused new momentum into the deal landscape, with notable value and volume growth.
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"With the elections behind in India, we saw an increase in deal activity both in terms of volume and value compared to the previous quarter. the third quarter of 2024 witnessed 79 deals valued at $635 million, representing a 5% increase in volumes and a 31% increase in values," he said.
Out of the total deals, 12 were valued at and over $20 million, the report said.
Mergers and Acquisitions activity rebounded after a significant drop in the first quarter of 2024, growing by 44% sequentially to 26 deals in the third quarter.
Deal values in M&A surged 205% to $116 million, up from $38 million in the second quarter, according to the report.
M&A volumes increased year-on-year by 53%, but values decreased by 89%, reflecting an absence of big-ticket deals.
Moreover, the report said that nearly 65% of transactions did not disclose deal values, which also contributes to the decline in overall deal valuation.
"The investors remain quite bullish on the Indian story. India has been one of the key beneficiaries of capital flowing into the markets," Lahiri said, adding that the large number of IPOs lined up should give enough confidence to investors in the exit opportunities.
With some investors expected to make stellar exits from these IPOs, they should have enough capital to make fresh investments even after returning a part of it to their LPs, he said.
Furthermore, the funding activity in the startup ecosystem has improved significantly year-on-year with the number of deals and funding values increasing nearly 62% and 40% respectively, the report said.
Grant Thornton Bharat offers services and solutions in assurance, tax, technology, managed services, deals, ESG and risk consulting.
It has 19 offices across India, with an employee count of over 10,000.
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