In the July – September 2024 quarter, the Indian tech sector witnessed a whopping rise in deals. It jumped by 31% year-on-year basis and the overall worth of the deals was around $635 million as per Grant Thornton’s report on the tech sector. While the value of deals witnessed a significant increase in the past quarters, but volume of deals had been the lowest in 2024, which reflects the inclination of the investors towards strategic investments instead of large-scale mergers and acquisitions.
Grant Thornton Bharat’s Q3 Dealtracker Report – Tech Sector
As per Grant Thornton Bharat’s Q3 Dealtracker report, the Indian tech sector cracked 79 deals in this July-September quarter of 2024 which is worth $635 million. While the value of deals has gone up a whopping 31% during the quarter, the volume increased by 5%. Out of the 79 deals, 12 deals were equal or above the value of $20 million.
Coming to the Mergers and Acquisitions, in this July – September quarter, there had been a rebound in these activities and there were 26 deals during the quarter, which depicts a 44% rise compared to the previous quarter. This has been a significant turnaround as in Q1 2024, the M&A activities tanked significantly. The value of deals in this segment has gone up to a whopping $116 million, which is a 205% surge from Q2’s deal value of $38 million.
However, while the volume of M&A increased by 53% YoY, the values of M$A tanked by a massive 89% in this quarter. This reflects the absence of major deals in the market or the big-ticket ones.
Factors Driving the Jump in the Tech Sector
As per the Grant Thornton report on the tech sector and its Partner Raja Lahiri’s comments, the reasons behind the growth in the tech sector in the July-September quarter include –
- The stability in the Indian government and economic measures after the Lok Sabha election
- The recent interest rate cut by the FED US has also influenced the growing demand for tech services from India which added to the value and volume of the tech deals.
- Investors are positive about the economic growth in India, and overall ‘India’s growth story’. India has been one of the most important economies where capital flow has been rising significantly.
- Significant growth in the IPOs also added to the rise in the positive sentiments of the investors and opened multiple exit opportunities.
- The exponential listing gains from successful IPOs, also made the investors have more disposable income, which is coming into the tech sector as fresh investments.
- Finally, the favorable ecosystem for startups in the country is attracting more deals. The funding values increased by 40% YoY while the number of deals increased by 62% during the same period for the startups.
Wrapping up
The rising value and volume of deals in the Indian tech sector indicate investing opportunities however, you need to analyze the entire industry and specific companies in the sector before putting your money into it.
Source: IBEF
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