<p>Of the 24 deals, 6 were M&A activities valuing USD 172 mn and 18 were PE and VC activities valuing USD 185 mn.</p>
Of the 24 offers, 6 had been M&A actions valuing USD 172 mn and 18 had been PE and VC actions valuing USD 185 mn.

New Delhi: Because the Indian automotive trade continues its path to sustained restoration towards the backdrop of worldwide macroeconomic challenges and a broader market slowdown, the sector has witnessed a development of selective investments, characterised by sustained deal volumes.

Throughout Q1 2024 (January- March), 24 offers valued at USD 357 million had been signed. Nevertheless, the quarter witnessed a 49% decline in values over This autumn 2023 (October- December), owing to a broader market slowdown and world inflationary tendencies, in line with the information sourced from Grant Thornton Bharat.

Of the 24 offers, 6 had been M&A (mergers and acquisitions) actions valuing USD 172 mn and 18 had been PE (non-public fairness) and VC (enterprise capitalists) actions valuing USD 185 mn.

In accordance with Saket Mehra, Associate, Grant Thornton Bharat, “The trade’s engagements with each M&A and PE investments level to a strategic recalibration, aiming to leverage world partnerships, technological developments, and market alternatives to navigate the evolving automotive panorama.”

High M&A offers throughout Q1 2024

S. NoAcquirerGoalSub-sectorUSD MillionDeal Sort% stakeHome/ Worldwide
1Mitsui & Co and VDL GroupPinnacle Mobility Answer- Eka MobilityEVs100Controlling stakeNAInbound
2Mitsubishi CorpTVS MobilityVehicles36Strategic stake32%Inbound
3Magna WorldwideYulu BikesMaaS14Minority stakeNAInbound
4Mahanagar Gasoline Restricted3ev IndustriesEVs12Minority stakeNAHome
5Bajaj AutoYulu BikesMaaS6Rising stake to 18.8%1%Home

Supply: Grant Thornton Bharat

Nevertheless, Mehra famous that within the January-March quarter, there was a 30% lower in values in comparison with This autumn 2023, primarily owing to a common market slowdown and world inflation tendencies. Whereas there have been a number of high-value offers exceeding USD 50 million, the market was largely characterised by quite a few smaller, bolt-on transactions. This means a strategic shift in the direction of extra frequent however smaller acquisitions or investments, somewhat than a number of large-scale transactions.

Vital non-public fairness funding in Hero Motors by GEF Capital Companions and angel traders within the earlier quarter boosted complete deal values. The decline this quarter was as a result of increased base impression. Moreover, the broader market slowdown in February 2024 additionally contributed to decrease deal values. This aligns with about 20% lower in world deal exercise in Q1 2024, reflecting the difficult and unsure world market situations witnessed in 2023.

By way of the sub sectors, MaaS (mobility-as-a-service) and EVs (electrical automobiles) led the deal volumes and values with 19 offers valuing USD 259 million, with a concentrate on R&D and the event of sustainable mobility.

High PE offers throughout Q1 2024

InvestorInvesteeSub sectorUSD million% stake
CreadorHinduja Tech RestrictedVehicles50NA
Nationwide Infrastructure and Funding Fund- India-Japan FundMahindra final Mile MobilityEVs48NA
Yamaha Motor Co, AI Futtam Automotive, Lowercarbon capital, Toyota ventures and Maniv mobilityWorld of River- RiverEVs40NA
3one4 Capital, Saison Capital, Zephyr Peacock India, Drive Ventures, Alteria Capital and angel investorVidyuttech Companies- VidyutAuto tech10NA
Bennett Coleman and Co. Ltd, Hindustan Occasions Media Ventures, Ushodaya Enterprises and angel tradersPuR Vitality- Pure EVEVs8NA

Supply: Grant Thornton Bharat

“Besides for 2 offers with values over USD 50 million, the market is dominated by a bigger variety of smaller worth transactions. The smaller deal dimension signifies a strategic shift in additional, however smaller bolt on acquisitions in early stage investments, versus few massive scale transactions. Moreover, the broader market slowdown in February 2024 contributed to decrease deal values. Conventional auto part firms are anticipated to have interaction in acquisitions to reinforce their EV capabilities,” the accounting and advisory agency mentioned.

Highway forward

The ADB (Asian Growth Financial institution) forecasts India’s progress charge at 7% for FY25 and seven.2% for FY26.

Mehra believes that the automotive trade is poised for important deal exercise owing to world progress projections at 3.1% in 2024 and three.2% in 2025. This will probably be bolstered by the resilience of rising markets like India.

“Notably, the auto and EV sector is predicted to be a major driver of this progress,” Mehra mentioned.

“Because the EV market matures and consolidates for synergies, the automotive trade is poised to witness elevated deal momentum in 2025 and past. This development displays a strategic response to evolving shopper calls for, technological improvements, and regulatory shifts, paving the best way for safer, smarter, and extra sustainable mobility options,” he added.

  • Printed On Apr 22, 2024 at 03:58 PM IST

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