Indian auto sector sees $1.9 billion investment in Q3 2024: Report

New Delhi: The Indian automotive sector witnessed a significant resurgence in the third quarter of 2024, with 32 deals amounting to $1.9 billion across mergers and acquisitions (M&A), private equity (PE), initial public offerings (IPO), and qualified institutional placements (QIP), the as per the report by Grant Thornton.

This marked the highest quarterly activity since the fourth quarter of 2021, it added.

As per the report, the quarter also saw a 30 per cent growth in deal values compared to the second quarter of 2024, signaling renewed investor confidence in the automotive industry.

The report highlights that the M&A activity has also rebounded with investors focusing more on innovation.

M&A activity in the auto sector saw 6 deals worth USD 74 million, representing a 20 per cent increase in volume and a 30 per cent rise in value from the second quarter of 2024, the report adds.

The major M&A deal of the quarter was Exicom Tele-Systems Ltd's USD 30 million acquisition of a charging technology company, Tritium Pty Ltd.

"With government support through the PM E- DRIVE scheme and the industry's focus on alternative fuel technologies, we expect increased global PE investments and partnerships, positioning India as a leading export hub for electric and smart mobility solutions," said Saket Mehra, Partner, Grant Thornton Bharat.

The PE and VC landscape also saw major growth during the quarter with 22 deals worth USD 542 million. This was a 30 per cent increase in value from the previous quarter, the report adds.

EV and Mobility-as-a-Service (MaaS) subsectors dominated the PE landscape, with 17 deals totaling USD 518 million.
WestBridge Capital's USD 200 million investment in the Rapido led to the high-value deals. Additionally, the average deal size surged to USD 25 million, reflecting growing confidence among investors, the report highlights.

Global players, such as Carlyle, have also set their sights on India's automotive sector, building USD 400 million platforms to acquire and merge mid-market companies specializing in EV technologies.

Going further, the report added that the IPO (Initial Public Offering) and QIP (Qualified Institutional Placement) landscape in Q3 2024 also saw heightened activity, with two IPOs worth USD 768 million and two QIPs raising USD 470 million.

Notably, Rapido and Ather Energy became unicorns, and Ola Electric's multi-million-dollar IPO provided a significant boost to the sector.