India Sees Record M&A Volume in 2021, First-Time Buyers Lead

According to a recent report released on Tuesday, India’s mergers and acquisitions (M&A) reached an all-time high in 2021, with more first-time buyers accounting for more than 80% of the deals done in 2020 and 2021, up from less than 70% from 2017 to 2019.

According to a Bain & Company analysis, the type of agreements was diverse, with more mid-sized deals ranging from US$ 500 million to US$ 1 billion, as opposed to the massive US$ 5 billion deals that dominated activity in 2017-19.

“The unprecedented flurry of deals seen in 2021 is the result of a higher pressure to grow and a need to seize more opportunities to disrupt, faced by CEOs today,” said Karan Singh, managing partner, Bain & Company India and author of the report.

Nearly half (46%) of all strategic transactions above US$ 75 million closed in 2021 were scope and capability deals.

This is significantly higher than the 36% of such agreements reported in 2020 and 31% in 2019.

With recent acquisitions in the retail, digital, and renewables industries Reliance has witnessed aggressive growth, Tata Group has also been managing its portfolio aggressively and has done over 20 deals in the last two years. 

“We foresee this trend continuing and another exceptional year for Indian M&A in 2022. There is plenty of historic evidence that shows that companies that sharpen their portfolios through acquisitions/divestitures during turbulence do better than the market,” said Singh.