Grant Thornton Bharat’s exclusive report with CNBC-TV18 sums up the deal momentum for the month of August, which have clocked in merger and acquisition (M&A) as well as fundraise worth nearly $8.4 billion, best since 2005.

The transaction value jumped 5.8 times from a year ago period and with the maximum thrust coming in from the private equity investments. It is the tech startup space, which has really clocked in massive action on the Deal Street and the fundraising at higher valuation has also catapulted seven new startups in the coveted club of the unicorns in the month of August.

EdTech ranks high with Eruditus and upGrad; from fintech BharatPe, OfBusiness and CoinDCX, even Droom and Zetwerk have got seats on the table with investors. Remember, most unicorns head for an IPO and this has been a theme in the markets.

CNBC-TV18’s Nisha Poddar gets more details on the deal tracker for the month of August.

On deal activity, Prashant Mehra, Partner at Grant Thornton Bharat, said, “There are two, three flavours also that we are seeing one though the M&A activity has remained at the same pace as it was last year but within that M&A activity, we have seen the domestic activity picked up. However, what has actually declined is the inbound cross border and perhaps the reason for that is that foreign money is now being diverted straight into the market instead of private transactions. That flavour will possibly continue because the IPO activity is at a heightened stage.”

“I think what we can expect in terms of September, I don't see the trend changing for the next few months. Perhaps till the end of the calendar year, it will continue to be the same.”

Talking about developing theme in deals, Mehra said, “There are two themes that will continue in parallel, what we call the evergreen sectors, which is energy, pharma. I think they will have their own track, which was where the large transactions will really be focusing on. Then we have, of course, got what we now call the new tech, which is where all enabler and allied industries will come, whether it is pharma tech, edu tech, XYZ, these channels will continue. Whereas the large private equities would and domestic consolidations will possibly happened in the evergreen sectors. But yes, we will see a lot of new investments coming into the new tech industry, and that flavour will continue possibly till the end of the year.”

Talking about brick and mortar legacy capital intensive companies, he said, “I think when there is a challenge, there is also an opportunity, the opportunity is now for consolidation. When you bring about economies of scale, prices will automatically come down and that I think will possibly be a medium to long term scenario."

"But does that mean that the evergreen sectors whether it is infrastructure energy, they will not be relevant? No, they will continue to be relevant because we will we will need more and more energy as we grow, we will need more and more infrastructure as we grow. I think now there is very healthy participation of the public and private sector. I don't see any reason why these sectors could be stretched for a long period of time, it could probably be just on the verge of coming out of the red.”

For full interview, watch accompanying video...

First Published:Sept 13, 2021 3:36 PM IST