Key Points

India recorded 179 deals valued at $4.5 billion in May. Excluding IPOs and QIPs, the market saw 175 transactions worth $4.2 billion, reflecting a 17 per cent drop in volumes and a marginal 4 per cent decline in values compared to April, according to the report by Grant Thornton Bharat.

Additionally, the uptick in outbound M&A signals growing corporate confidence in global expansion and strategic diversification.

"May marked a slowdown in overall deal activity due to muted private equity sentiment. The emergence of two unicorns and an uptick in Corporate India's outbound deals indicate a promising deal outlook,” said Shanthi Vijetha, Partner, Growth at Grant Thornton Bharat.

“Expect deal momentum to build in the second half in the backdrop of a rejuvenated IPO market,” she mentioned.

The Mergers and Acquisitions (M&A) activity in May remained steady, with 68 deals valued at $2.4 billion, marking a 75 per cent increase in deal value compared to April, despite a marginal 1 per cent dip in volumes.

Notably, outbound M&A activity saw a sharp rise, with 15 deals closed versus just two in April, signalling renewed confidence among Indian corporates to pursue cross-border growth and integration after nearly a decade.

The private equity sector saw a silver lining with the emergence of two unicorns -- Drools Pet Foods and JSW One Platforms -- reflecting selective investor optimism.

Capital markets remained subdued in May, with only two IPOs raising $0.3 billion -- consistent with the previous month's tepid activity.

Banking and Financial Services continued to dominate deal values, contributing 42 per cent of the total for the month, led by Sumitomo Mitsui's $1.6 billion investment in YES Bank.

The Retail and Consumer sector maintained strong deal momentum, driven by early-stage VC activity and large-ticket investments in fashion retail segments like Citykart's $68 million raise, the report said.

- IANS