India Inc saw steepest decline in deal values owing to the lack of big-ticket investments last month, registering 171 mergers and acquisitions (M&A) and private equity (PE) deals valued at $2 billion, a new report has shown.

At $280 million for 32 deals in July, the M&A deals witnessed significant downtrend both in terms of deal volumes, by 14 per cent, and deal values by 95 per cent, according to Grant Thornton Bharat Dealtracker report.

Cross-border transactions recorded the second lowest, both in terms of deal volumes and values in the last 12 months owing to global tensions.

With 28 per cent of M&A deal volumes each, the start-up and IT sectors continued to dominate deal activity with nine deals each cumulatively valued at $162 million.

"Like many other countries, Asia's third-largest economy has also been grappling with soaring inflation, aggravated by rising commodity prices. A weaker rupee has further bumped up imported inflation," said Shanthi Vijetha, Partner, Growth, Grant Thornton Bharat.

Nevertheless, start-up, e-commerce and IT led the deal volumes for the month, while "infra, pharma, retail and banking sectors topped the overall value".

"The month saw the birth of only one Unicorn, OneCard, in the fintech segment," she mentioned.

While M&A deal activity saw an uptick in deal volumes compared to June, which saw the lowest monthly volumes in the last 19 months, the deal values saw a decline due to lack of high-value transactions and non-disclosure of values in the majority of the deals.

The PE landscape saw 139 deals valued at $1.7 billion.

While PE transactions continued to account for over 80 per cent of overall deal activity, deal values witnessed a significant decline.

"The start-up sector continued to drive the PE deal volumes for July 2022 with a 70 per cent share of volumes, with investment values of $0.6 billion," the report said.

The retail tech segment led the investment volumes in the start-up sector with 20 per cent deals, followed by enterprise application and infrastructure and fintech at 18 per cent each.

The year-to-date (YTD) 2022 recorded 17 initial public offerings (IPO) with an issue size of $6 billion, compared to 28 IPO issues, raising $7 billion in YTD 2021, the report mentioned.