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 India Inc recorded 106 deals valuing $4.6 billion last month -- a 45 per cent decline in deal volumes and a steep 87 per cent decline in deal values compared to May last year, a report showed on Monday.

The month of May saw only one IPO raising $390 million, compared to eight issues raising $4 billion witnessed in May last year.

Unlike May last year, which saw four multi-billion-dollar deals worth $31.5 billion, the month gone by witnessed an absence of big-ticket transactions, according to Grant Thornton Bharat's aDealtracker May 2023' report.

Mergers and acquisitions (M&A) deal activity experienced a significant decline, with a 45 per cent decrease in deal volumes and a notable 98 per cent decrease in values compared to May 2022, recording only 22 deals valued at $675 million.

Domestic volumes reached a three-year low with 20 deals, while cross-border activity hit its lowest monthly volumes and values to date.

"We are currently seeing persistent global macro-concerns center around inflationary pressures in the US and eurozone. India is also experiencing a downturn in deal activity compared to past year," said Shanthi Vijetha, Partner-Growth at Grant Thornton Bharat.

While there has been an overall decline in the deal activity compared to past years, both M&A and PE volumes have witnessed a gradual month-on-month increase since February.

"In addition, the government's emphasis on regulatory reforms to enhance the ease of doing business, combined with the country's robust fundamentals, create a strong foundation for deal-making in India," Vijetha added.

Despite a 44 per cent decrease in investment volumes and a 45 per cent decline in values, compared to May 2022, private equity (PE) landscape recorded 84 deals raising $3.9 billion in May 2023.

The startup sector continued to dominate deal activity, accounting for 55 per cent of total PE deal volumes.

Among startups, the enterprise application and infrastructure segment saw increased activity, followed by the fintech and retail segments, collectively contributing to 67 per cent of the start-up sector's volumes, the report noted.