Indian Automotive Sector Sees Major Growth in Q3 2024
The Indian automotive industry experienced a significant boost in the third quarter of 2024, with 32 deals totaling USD 1.9 billion. These deals included mergers and acquisitions (M&A), private equity (PE), initial public offerings (IPO), and qualified institutional placements (QIP), according to a report by Grant Thornton.
Record Activity Since 2021
This quarter marked the highest level of activity since the fourth quarter of 2021, with a 30% increase in deal values compared to the second quarter of 2024. This indicates renewed investor confidence in the automotive sector.
Mergers and Acquisitions
M&A activity saw 6 deals worth USD 74 million, a 20% increase in volume and a 30% rise in value from the previous quarter. A notable deal was Exicom Tele-Systems Ltd’s USD 30 million acquisition of Tritium Pty Ltd, a charging technology company.
Private Equity and Venture Capital
The PE and VC landscape also grew, with 22 deals worth USD 542 million, a 30% increase in value from the previous quarter. The EV and Mobility-as-a-Service (MaaS) subsectors led the way with 17 deals totaling USD 518 million. WestBridge Capital’s USD 200 million investment in Rapido was a highlight.
Global Interest and IPO Activity
Global investors like Carlyle are focusing on India’s automotive sector, creating USD 400 million platforms for EV technology companies. The IPO and QIP landscape also saw growth, with two IPOs worth USD 768 million and two QIPs raising USD 470 million. Rapido and Ather Energy became unicorns, and Ola Electric’s IPO was a major boost.
Saket Mehra, Partner at Grant Thornton Bharat, noted the impact of government support through the PM E-DRIVE scheme and the industry’s focus on alternative fuel technologies, positioning India as a leading export hub for electric and smart mobility solutions.
Doubts Revealed
Q3 2024 -: Q3 2024 refers to the third quarter of the year 2024, which includes the months of July, August, and September.
USD 1.9 billion -: USD 1.9 billion is a large amount of money, equivalent to 1.9 billion US dollars. In Indian rupees, this would be a much larger number due to the exchange rate.
Mergers and acquisitions -: Mergers and acquisitions are business activities where companies combine together or one company buys another. This helps them grow bigger and stronger.
Exicom -: Exicom is a company that deals with technology and energy solutions. They recently bought another company called Tritium for USD 30 million.
Tritium -: Tritium is a company that makes fast chargers for electric vehicles. They were acquired by Exicom for USD 30 million.
Private equity -: Private equity involves investing money into private companies to help them grow. Investors hope to make a profit when the company does well.
WestBridge -: WestBridge is an investment firm that provides money to companies to help them grow. They invested USD 200 million in Rapido.
Rapido -: Rapido is an Indian company that provides bike taxi services. They received a big investment from WestBridge.
Carlyle -: Carlyle is a global investment firm that invests in various sectors, including technology. They are interested in electric vehicle technologies.
EV technologies -: EV technologies refer to technologies used in electric vehicles, which are cars or bikes that run on electricity instead of petrol or diesel.
IPOs -: IPOs, or Initial Public Offerings, are when a company sells its shares to the public for the first time to raise money.
QIPs -: QIPs, or Qualified Institutional Placements, are a way for companies to raise money by selling shares to institutional investors like banks or mutual funds.
Unicorns -: In business, unicorns are companies that are valued at over USD 1 billion. Rapido and Ather Energy became unicorns, meaning they are now worth a lot of money.
Ather Energy -: Ather Energy is an Indian company that makes electric scooters. They have become very valuable and are now considered a unicorn.