Activity and growth in M&As dominated the Indian scenario in 2024. The Securities and Exchange Board of India (SEBI) regulations on takeovers saw public takeovers reach 105, an increase of 24% from 2023. The value of these deals saw an astonishing increase of 158% to a cumulative INR 705.89 billion, which had been just INR 274.27 billion in 2023. This growth can be largely attributed to domestic strategic acquirers, who consolidated their positions in 2024 quite intensely. Foreign acquirers also picked up pace and made significant inroads into the Indian market.
The M&A scene in India saw Indian conglomerates much active in horizontal and vertical integrations. Major deals included the Tata Group’s merger of Air India and Vistara, major acquisition expansion by Adani Group in the cement and construction industries, and the Bosche Group acquisition of Johnson Controls-Hitachi Air-Conditioning. These activities represented a larger trend of consolidation engagement by large domestic players aimed at strengthening their positions in their industry. Among the other significant happenings were the demerger of ITC’s hotels business and Vedanta moving toward six independent companies.
2024 Was Record IPO Activity
A booming Indian IPO market in 2024 observed the launch of 332 IPOs-more than the global markets. This mad rush of IPOs attracted a lot of international or domestic players who found reasons to raise capital or excise their investments. One of the remarkable events was the IPO of Hyundai Motors India, which went on to become the largest Indian IPO in history. Private equity (PE) firms had been quite active in this space, contemplating IPOs as a means of exiting long-standing investments in listed companies. While PE players were being somewhat cautious in approaching the public takeover arena because of the inflated stock market valuations, it is anticipated that they would then set their sights on public companies for takeovers as soon as the market prices become indicative.
Sector-wise Takeover Activity in 2024
The electronics sector was on the top in terms of transaction value due to Bosch Group’s acquisition of Johnson Controls-Hitachi worth INR 294.06 billion. Cement was soon behind with deals worth INR 130 billion, and the NBFC sector contributed INR 80.71 billion in terms of deal value. The textiles, IT, healthcare, and real estate sectors also saw a high deal volume, particularly in the first half of the year.
Remarkably, the top five major deals by value in 2024 were confined largely to the electronics and cement sectors, with big names like Bosch, Aditya Birla Group, and Adani Group acquiring major stakes. These five transactions alone made up 78.27% of the total transaction value of the year.
A close inspection of the deal :- pricing indicates that in 87 takeover cases, the price offered to the public shareholders exceeded the minimum price requirement set by the SEBI. In 57 cases, the negotiated price was higher than the minimum price requirement while, in 31 deals, the negotiated price was lower. The wide range in the price of deals, thus, represents the varying dynamics of the Indian M&A market, where the sellers and buyers would often find means to resolve their divergence in valuation, even possibly to an extent of, agreeing upon prices lower than the market valuation.
In terms of deal size, the year saw the Bosch Group acquire The Johnson Controls-Hitachi Air Conditioning India for INR 294.05 billion, being the largest acquisition. On the other end of the deal spectrum was the disinvestment of Supra Industrial Resources Limited at a negligible price of INR 7.16 lakh.
Foreign vs. Domestic Acquirers
Foreign acquirers stood tall in the Indian market with 11 public takeovers in 2024. These transactions valued at INR 464.83 billion constituted 65.85% of the total deal value for the year. This is a stark contrast to only 3 deals being pursued by foreign investors back in 2023, accentuating the growing interest of international players in India’s blossoming market.
SEBI Approvals: Timelines and Regulatory Perspective
There was some increase in a few delays in the review process of draft letter of offers (DLOFs) conducted by SEBI. SEBI took an average of 81 days in 2024 for the clearance of DLOFs, more than the previous year. The maximum wait went up to 158 days, while the shortest lay at 40. Such a delay was attributed to complex transactions and regulatory reviews that take time in some cases.
M&A Outlook-2025
India’s M&A market is expected to continue being busy in 2025. Major focus shall be on the areas of energy transition, electrification, healthcare, infrastructure, fintech, and IT with special emphasize on AI-driven technology. Indian conglomerates are expected to keep executing M&A for their expansion plans while private equity players will continue utilizing IPOs as an exit route.
The IPO market will hopefully remain buoyant, with mega IPOs like Reliance Jio’s anticipated listing likely to etch new records. This may offer a pathway for private equity players to exit from their investments in Indian companies. Moreover, another trend is the increasing sale of NPAs, which may mean some revival in stress asset-related M&A in 2025. For instance, IndusInd Bank has already announced the sale of NPAs worth INR 1,573 crore from its micro-finance loan portfolio.
After all, mergers and acquisitions activities will be in full swing. The Indian economy will continue to evolve as more players come in- both domestic and international-for strategic acquisitions. Companies will be looking at various sectors and will multiply in interest as these events unfold by witnessing India’s growing consumer base, technological adoption, and sustainable development.
Conclusion
In short, 2024 was truly the year for the M&A window in India in which the contracts saw more power than ever and a full-fledged IPO market made its presence felt hotly along with international players on the scene. As we transition into 2025, the expectation of a continuation of mergers and acquisitions, sectoral consolidation, and IPOs ensuring exit strategies seems realistic. Areas of action will be the energy, healthcare, IT, and infrastructure sectors of choice and PE-backed deals would certainly assist in developing the market. With renewed interest in the Indian growth story, it seems the M&A circuit is blessed with another great year!
