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M&As in the Tech Sector: Q4FY24 Insights - Blog 2/2
M&As in the Tech Sector: Q4FY24 Insights - Blog 2/2

June 14, 2024

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This is the second blog in a two-part series detailing the Indian M&A landscape in Q4FY24.

 

 

Strategic Reasons for M&A

In Q4FY24, the primary reason for M&As was strengthening capabilities, followed by business expansion and geographic expansion. Below are some examples for each driver:

 

Source: Venture Intelligence, Nasscom

 

Source: Venture Intelligence, Nasscom

 

Source: Venture Intelligence, Nasscom

 

ER&D - A Focus for Acquisitions

 

Mid-Tier Companies Lead M&A Deals

 

Midsize firms have recently announced deals across various segments such as consulting, startups, engineering services, data, and analytics.

 

 

A noticeable trend within these acquisitions is of the mid-tier technology companies that are increasingly acquiring ER&D companies to boost their revenue in a slowing demand environment. This helps the tech companies to expand their skill sets and gain a competitive advantage.

Acquisitions by large tech companies in the ER&D space

Big tech companies adopted a similar strategy with acquisitions in the ER&D space.

Prioritizing ER&D and New Technologies for Sustainable and Connected Vehicles

The industry is focusing on ER&D and new technologies to support the transition towards sustainable and connected vehicles, leading to consolidation for synergies and value creation.

  • TVS Mobility and Mitsubishi Corporation: Mitsubishi Corporation has acquired approximately 32% stake in TVS Mobility’s new subsidiary, TVS Vehicle Mobility Solution (TVS VMS), with a USD 36 Mn investment. This indicates strong confidence in the growth potential of TVS’s dealership business in India. The partnership aims to transform TVS Mobility’s dealership operations, enhancing service offerings across its automotive solutions and shifting towards digital and comprehensive vehicle mobility services.

 

  • Mitsui & Co. and Pinnacle Mobility: Mitsui & Co.'s investment in Pinnacle Mobility, producer of the EKA brand of electric buses and commercial vehicles, aims to establish India as a leader in EV manufacturing. Backed by Mitsui’s global network and VDL’s technology, this move supports the ‘Make in India’ initiative.

 

  • Hinduja Tech and Creador: Hinduja Tech’s recent USD 50 Mn partnership with Creador, resulting in a significant stake acquisition, highlights a push for developing advanced, sustainable mobility engineering solutions.

 

It will be interesting to see how these acquisition strategies evolve in the coming quarters and their broader impact on the tech industry landscape. Stay tuned for more insightful blogs and updates.

 

Source:


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Prajwal Pandey
Research Analyst

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