The frenzied deal activity comes amid expectations of stellar growth in India’s consumption story.
According to a 2019 Insight Report by the Geneva-based World Economic Forum in association with consulting firm Bain & Company, the sector is expected to rise from $1.5 trillion before the pandemic to nearly $6 trillion by 2030.
“The number of deals in the space picked up due to the emergence of many newer brands in the last couple of years. Legacy firms which missed out the niches have been picking up stakes or buying out these firms. Typically, these new-age brands have picked up on niche demand segments, which has attracted the interest of FMCG (fast-moving consumer goods) firms and other investors,” said Sudhir Dash, founder and chief executive officer of Mumbai-based Unaprime Investment Advisors.
The BS analysis looked at consumption themes like apparel, entertainment, food service, housewares, leisure time, lodging, retail, textiles, toys or games or hobbies, beverages, cosmetics or personal care, food, household products or wares. It includes all deals recorded in during 2022 — whether proposed, pending, completed, terminated, or withdrawn. Some transactions were structured as more than one deal, and have been counted accordingly as given in the Bloomberg database. The total deal value is indicative, based on available information.
Though deal value rose manifold from 10 deals worth $1.1 billion in 1998, the 2022 figure was the third highest in 25 years. It had reached $25.3 billion in 2020 and $31.8 billion in 2018.
Reliance led the deal-making among the conglomerates and key existing players in the consumption space in 2022, accounting for 15 deals worth $905 million. This included bids for retail player Metro Cash and Carry and apparel brand Purple Panda Fashions.
Aditya Birla Fashion and Retail had seven deals worth $301 million, including the acquisitions of direct-to-consumer player Bewakoof Brands and fashion company House of Masaba Lifestyle.
Tata Consumer Products was associated with three deals potentially worth $863 million, including the one for Bisleri. Hindustan Unilever had acquisitions structured through five deals worth $51 million, including the purchase of a stake in Zywie Ventures.
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