India Inc witnessed a 3 per cent rise in deal activity to USD 13.2 billion across 181 transactions in July, a report said on Tuesday. Going by the number of deals, the volumes showed a 66 percent increase to 181 transactions, thus indicating a dip in average ticket sizes, the data by the consultancy firm Grant Thornton Bharat said.

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When compared to the preceding June, the deal volumes were 6 per cent higher, while the deal values were 33 per cent up because of a higher number of big-ticket transactions, it added. This surge in deal activity was primarily due to companies continuing to borrow economically and spending their cash reserves on transformative deals to reposition themselves for the post-COVID-19 world, its partner Shanthi Vijetha said.

Vijetha said the firm hopes for the deal trend will remain positive in the coming months too. According to the report, the USD 13.2 billion of investments is the highest ever for any month since 2005.

Mergers and acquisitions (M&A) activity witnessed 36 deals worth USD 5.6 billion in July, it said, adding that the volumes were up by 13 per cent on a year-on-year basis, and deal values dropped by 37 per cent owing to a shortfall in the big-ticket transactions. Private equity (PE)/venture capital (VC) investments stood at 145 deals valued at USD 7.5 billion, boosted by a surge in equities, higher liquidity and an increased interest in sectors that have benefited from the coronavirus pandemic, it noted.

PE deals were also fuelled by improved lending appetite as many businesses across the nation rebounded from the last year's pandemic-induced slump, it said, adding that greater adoption of the online business models also worked in favour of upping the activity. The bulk of the deals were in IT solutions, e-commerce, consumer retail, digital healthcare, fintech and edtech companies, whose products and services have seen strong demand during the pandemic, it pointed out.

On the M&A side, the startup sector led deal volumes with 10 transactions worth USD 46 million, while banking and financial services led on the value front with five deals worth USD 2.26 billion, as per the report. On the PE side, e-commerce led with 11 deals worth USD 5 billion as against 99 startup deals, which saw investments of USD 1.04 billion, the report said.