India's Consumer Retail Sector Surges Amid Notable Deals and Expansion

India's consumer retail sector is thriving with 123 deals valued at USD 3.1 billion in Q3 2024, mainly fueled by quick commerce growth and direct-to-consumer brands. Despite a slight dip in M&A and PE values, small-ticket PE deals are surging, and the festive season promises further significant sales growth.

India's consumer retail sector is experiencing a significant upturn with the execution of 123 deals valued at USD 3.1 billion in the third quarter of 2024. The momentum is largely driven by rapid advances in quick commerce and the growth of direct-to-consumer brands, according to a recent report by Grant Thornton.

Since the third quarter of 2023, the sector has been at the forefront, accounting for 20 percent of total deal volumes, marking the highest level of activity in two years. Mergers and acquisitions (M&A) saw their highest quarterly volumes since early 2022, with deal values up by 26 percent compared to the previous quarter. However, both M&A and private equity (PE) deal values dropped 9 percent from the second quarter of 2024, primarily due to undisclosed M&A deal values and smaller PE transactions.

In the M&A space, 31 deals worth USD 629 million were recorded, reflecting a 36 percent rise in value from the previous quarter. Domestic M&A played a leading role, contributing 90 percent in volume and 97 percent in value. Cross-border activities remained stable in volume but dropped 94 percent in value, with Zomato Media's acquisition being the quarter's standout deal at USD 247 million.

Naveen Malpani, Partner at Grant Thornton Bharat, highlighted the sector's potential amidst the festive season, predicting a sales surge that would bolster investor confidence and demonstrate innovation and scalability potential. Meanwhile, the PE landscape recorded the second-highest quarterly volumes in two years, with small-ticket deals dominating and seven IPOs launched. Brainbess Solutions led with a USD 505 million IPO, signaling robust sector growth.

(With inputs from agencies.)