The report stated that despite a funding slowdown and economic uncertainty, India’s tech startup ecosystem secured the fourth-highest funding globally. Further, it said that Krutium AI emerged as one of the two unicorns in the quarter. Both M&A and PE activity witnessed increased deal activity over last two quarters.
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“India’s tech landscape has proven its robustness, growing 3.8% in FY2024, a testament to its endurance amid economic flux,” Raja Lahri, Partner & Technology Sector Leader of Grant Thornton Bharat said in a statement. “The surge in Q1 deal flow, boasting an 18% volume and 25% value increase, signifies a bounce-back with M&A at the forefront. Our strategic bets on AI and digital innovations position us to seize emerging prospects, steering us towards a dynamic FY25.”
The report stated that there were 19 M&A deals in the quarter totaling $215 million and that Q1 2024 saw a significant 46% increase in deal volumes and a whopping 497% rise in deal values compared to the previous quarter with the average deal size going from $2.8 million to
$11.3 million.
In addition to this, domestic consolidations accounted for 47% of deal volumes, while outbound transactions significantly contributed to the M&A deal values at 82%.
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“Domestic deals were pivotal in driving volumes. In contrast, U.S. companies played a leading role in outbound activities, with four deals (one acquisition and three stakes in foreign companies) comprising nearly 82% of total M&A deal values,” the report said.
The report also tracked 48 deals amounting to $433 million in the technology sector wherein Private Equity (PE) investments were dominant, leading 72% of the total transaction volumes and contributing to 67% of the total sector values.
“The information technology sector emerges as a primary beneficiary within this investment landscape, underlining its pivotal role in attracting PE/VC interests,” the report found.
It also highlighted the emergence of of two unicorns – Krutium AI and Perfios Software – during the quarter.
Further, it spoke of two IPOs that took place in the technology sector that accumulated a total of $110 million.
“Additionally, there were 3 QIPs, raising a total of USD 219 million. This activity underscores ongoing fundraising efforts in the capital markets. It also reflects sustained investor interest and confidence in tech companies during Q1 2024,” the report said.
