Tech M&As in India Lean Toward High-value Transactions The technology sector in India saw a noticeable shift towards high-value transactions, with strategic moves focused on improving technological and operational capabilities.
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The technology sector in India saw a noticeable shift towards high-value transactions, with strategic moves focused on improving technological and operational capabilities.
Tech mergers and acquisitions (M&A) remain a big factor in the country's overall M&A landscape, leading in both deal volume and value, according to a recent Nasscom report titled 2024 India IT Services M&A Deals Tracker.
The report highlighted that strategic deals contributed 59 per cent to the overall M&A deal value, driven by factors such as digital transformation, cloud adoption, and emerging technologies such as artificial intelligence (AI), increasing the deal value in CY24 over CY23.
The increase over the previous year was by 25 per cent, with domestic strategic M&A deals witnessing increased value aided by a positive economic environment. The Fintech space led the strategic M&As in 2024, recording a YoY increase in deal values. Building capabilities in digital experience and product engineering accounted for 28 per cent of the strategic deals volume.
The country also witnessed a host of M&As across various sectors with examples of strategic deals by strategic imperative. Zomato acquired Paytm's ticketing business in order to gain access to the ticketing market. Game developer Nazara acquired Fusebox Games aiming to solidify its presence in the UK gaming market and L&T acquired E2E Networks to enter the cloud and software licensing business.
IT services PE deal value however declined from USD 5.8 billion to USD 5.5 billion in CY24 because of rising cost capital and "cautious investment sentiment leading to reduction in large deals," said the report.
PE deal volumes in CY24 were driven by sub-USD 25 million transactions, showcasing a strategic emphasis on acquiring niche products and addressing capability gaps.
Sectors such as FinTech, EdTech, and Media & Entertainment led PE deals with a combined share of 34 per cent of the deal volume with travel, the only sector that registered growth with deal volume and value growing 1.6x and 2x respectively in CY24.
