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 India's strategic merger and acquisition (M&A) deal activity in 2023 maintained its long-term momentum, with deal volumes surpassing levels seen over the past 10 years, apart from the exceptional record year of 2022, a report showed on Tuesday.

The mid-market acquirers (up to $1 billion in revenue) accounted for nearly 50 per cent of the activity, primarily fueled by a healthy appetite seen in these companies for scale deals to build leadership positions, according to Bain & Company’s sixth annual ‘Global M&A Report’.

“Global strategic M&A deal volume was down 12 per cent over the last five-year average while India volume is up by about 10 per cent. Renewable energy, infrastructure, logistics, and manufacturing accounted for one in every three deals over the past 18 months,” said Karan Singh, Chairman, Bain & Company India.

The total global M&A market dropped 15 per cent to $3.2 trillion, the lowest level in a decade, as dealmakers grappling with high interest rates, regulatory scrutiny, and mixed macroeconomic signals had to be more selective about which deals to pursue in 2023.

But the biggest obstacle was the gap between valuations. At 10.1 times, overall strategic deal multiples were the lowest in 15 years.

“The drop in deal multiples led to a wait-and-see atmosphere in 2023, with many sellers hesitant to come to the table at a market bottom,” said Les Baird, partner and head of Bain & Company's global M&A and Divestitures practice.