India M&A sets new records in 2021

Dealmaker interest from both home and abroad, along with record private equity activity, has driven India’s dealmaking activity to an all-time high

In line with the global trend, India’s dealmaking activity reached a new milestone in 2021. A total of 598 deals valued at US$112.8 billion were recorded over the course of the year—the highest annual volume and value on record.

The size of deals is also getting larger, reflecting growing confidence at the top end of the market. A total of 23 deals valued at over US$1 billion in 2021 marks the highest number ever recorded within this price bracket.

Interest in deals came from both at home and abroad. Inbound activity reached a record high, in terms of both value and volume. Domestic activity, meanwhile, saw the highest annual volume on record.

Record TMT activity driven by foreign interest

The technology, media and telecom (TMT) sector was the most active in India in 2021. A total of 210 deals were announced over the course of the year, almost doubling the 108 deals announced in 2020 and an all-time high for the sector. Total TMT deal value of US$37.6 billion, meanwhile, also set a new record—narrowly beating 2018’s previous annual high, and an impressive rebound from 2019’s dip.

Interest from overseas bidders drove activity, with US$31 billion in deals accounting for 83% of deal value targeting firms in the sector.

The largest TMT transaction in 2021—and the second-largest transaction overall—was the acquisition of Billdesk by PayU Payments, a Netherlands-based payments gateway owned by Prosus, the Amsterdam-listed investment arm of South Africa’s Naspers internet group.

The US$4.7 billion acquisition comes as the number of digital retail payments increased by four-fifths to US$44 billion in 2020-21, according to the Reserve Bank of India.

Financial Services M&A boosted by domestic tie-ups

Financial services was the second most-targeted sector by value, following TMT, attracting US$22.1 billion in investment during 2021 and providing the highest-valued deal of the year overall: Shriram Transport Finance Co Ltd.’s US$5 billion acquisition of financial services group Shriram City Union Finance.

The transaction is part of a scheme of arrangement to merge three entities—Shriram Transport Finance, Shriram City Union Finance and their promoter entity Shriram Capital—to create Shriram Finance Ltd., with the aim of simplifying the holding structure, promoting digital initiatives across the group and attracting potential new investment.

Another major deal involving two homegrown companies was Piramal Capital and Housing Finance’s (PCHFL) US$4.7 billion acquisition of Dewan Housing Finance. The deal was the third-largest of the year, and will give PCHFL access to an estimated one million customers across 24 states.

Buyouts drive record PE performance

In line with overall dealmaking, private equity activity had a record-breaking year, achieving an all-time high in value and volume during 2021. Activity was bolstered by interest from buyout firms, particularly international firms, as they continue to seek opportunities in high-growth markets.

A total of 208 primary buyouts valued at US$33.6 billion were conducted over the course of the year, with overseas dealmakers accounting for 86% of annual value.

Key deals include Blackstone’s US$3.2 billion acquisition of an additional 26% stake in IT outsourcing services provider Mphasis, as the firm looks to further capitalize on the global shift to cloud computing. Blackstone previously bought a 61% stake in Mphasis in 2006.

Another significant deal highlighting the investment potential of cloud is Carlyle Group’s US$3 billion bid for IT services company Hexaware Technology, approved by regulators in October.

SPACs eye high-growth renewables  

US-listed SPACs continue to make their voices heard in markets across the globe, and India is no exception. In February, SPAC RMG Acquisition Corp. II merged with renewable energy producer ReNew power in a deal valued at US$3.6 billion. Following completion of the deal in August, ReNew became a listed company on the NASDAQ stock exchange.

The deal highlights the investment potential of India’s renewables sector, set for rapid growth in 2022. Shifting consumer expectations and the government’s ambitious target to reach 450 GW of installed renewables capacity by 2030 are driving this trend.


With private equity firms, SPACs and local and international corporations all seeking out opportunities within the country, India’s M&A could reach even greater heights in 2022.

With record levels of cash on their books, international buyout firms will continue to target assets in high-growth subsectors such as cloud computing and renewables, with US-listed SPACs also making their presence felt. Interest from international bidders looking to expand into new markets will only increase as global markets open up, macroeconomic conditions improve, and COVID-19 restrictions are gradually eased across the globe.

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