There have been several major Mergers & Acquisitions (M&As) deals in India in recent times with a surge in consolidations and big-ticket transactions. 2016 was significant has there were transactions worth USD 72.4 billion across nearly 1500 deals that marked a 44% year-on-year increase in values and broke the 2007 record of $67 billion. This was driven by a growth in domestic consumption, before the impact of demonetization, which helped in the increase of both domestic and cross-border deals. The major focus during this period was in core sectors like energy, natural resources, telecoms, pharmaceuticals and healthcare.
2017 was an even bigger success as M&A values rose to $ 77.6 billion, with a marked increase in value by 53.3% and volume of deals rising by 2.5%. Political stability and economic reforms helped propel the steady growth.
In 2018, the period from January to March witnessed 118 deals worth $18 billion. This was much greater in comparison with the same quarter in 2017.
As of May 2018, a record-breaking figure of $25 billion has been achieved due to the remarkable $16 billion Walmart-Flipkart deal. Walmart buying Flipkart, Schneider and Temasek buying L&T electricals has heavily boosted this trend of the return of foreign buyers.
Following this event, the total values over the past 5 months’ worth of deals has swelled up to $68 billion, with 204 transactions. Both inbound activity and domestic consolidation deals have been the highest in the past decade, thus seemingly providing a recovery from the disruptive effects of GST and demonetization. Among the big-ticket deals, 10 conformed to the under the billion-dollar category. Start-up companies led the way.
The momentum of the first half of 2018 is expected to continue during the rest of the year. A sharp deceleration akin to the one witnessed in the second half of 2011 had been anticipated but has not yet surfaced prominently. Large private equity investors who have already witnessed several cycles of elections are likely to stay afloat and in turn will possibly attract foreign strategic buyers who might be interested in acquiring Indian assets. Further, equity valuations have been found to trend in the middle range and this provides an important incentive in deal-making.
This has led to the negation of the expectation that large-scale deals would suffer major setbacks with the upcoming general elections stirring up major economic changes, leading to the economy losing its pace in the face of corporate valuations. Thus, 2018 may turn out to be brilliantly prospective in terms of Mergers and Acquisitions.
source https://www.indiaoutbound.org/an-overview-of-ma-deals-in-india/
No comments:
Post a Comment