Despite Increased Transactions, M&A Activity Sees Sharp Decline in April

According to a report by a consultancy firm, the overall merger and acquisition (M&A) activity by value witnessed a significant decline of 60% in April, totaling $5.192 billion compared to March’s $12.934 billion. Surprisingly, there was a 24% increase in the number of deals, totaling 176 transactions during the month.

The decline in value was particularly notable in merger and acquisition transactions, which dropped by 75% to $2.526 billion, down from $10.212 billion in March. Private equity transactions, on the other hand, saw a marginal decrease to $2.666 billion.

Within the M&A landscape, outbound deals experienced the sharpest decline, plummeting to $24 million compared to $9.072 billion in the previous month.

The highest M&A activity of the month was attributed to the Adani group’s 8% stake increase in Ambuja Cement and ACC, amounting to a cumulative $1.8 billion in two transactions.

Despite the dip in M&A activity, the outlook for 2024 remains positive, with India poised for growth and investment opportunities. Factors influencing the domestic markets in the near term include the outcome of the Lok Sabha elections and global and domestic trends in interest rates driven by inflation and supply chain dynamics.

Overall, while the number of transactions increased, the decline in M&A activity by value underscores the complexities and challenges within the market landscape.