Indian Auto Sector Secures $1.9 Billion Through 32 Deals in Q3

The Indian auto sector saw 32 deals worth $1.9 billion in the July-September period, marking the highest quarterly activity since Q4 2021, according to a report on Thursday. There was robust deal activity in both volumes and values, showcasing the auto sector's resilience and attractiveness to investors, according to the report by Grant Thornton Bharat. Three high-value deals valued at $300 million drove the growth, compared to one $100 million deal in Q2.

The mergers and acquisitions (M&A) activity saw six deals worth $74 million, representing a 20 per cent increase in volumes and 30 per cent growth in values from Q2.

“This resurgence marks a revival in M&A activity, driven by strategic investments in technological innovation, global expansion, and long-term value creation,” said the report.

It further stated that outbound M&A activity increased, with two deals showcasing the industry's focus on global partnerships, particularly in auto components and EV infrastructure. The September quarter witnessed a shift towards auto-tech and auto-component subsectors, indicating growing interest in strategic M&A.

Compared to the first half last year, Q3 saw significant growth, rebounding from a 67 per cent decline in Q2, with deal values increasing by 30 per cent, the report mentioned.

Top two investments accounted for 55 per cent of PE values, reflecting concentration of high-value deals, led by WestBridge Capital's $200 million investment in Roppen Transportation Services Pvt Ltd (Rapido).

Average ticket size increased to $25 million, up from USD 11 million in Q1 and USD 18 million in Q2, indicating growing investor confidence. India's focus on alternative fuel technologies enhances its appeal as an investment destination, positioning it as a key hub for sustainable and smart mobility solutions exports.

The third quarter witnessed two IPOs worth $768 million and two QIPs worth $470 million in the auto components space, said the report.