'India Inc's M&A, PE deals hit $60.5 bn in 2017; outlook bullish for 2018'

Tech sectors, including start-ups and IT & ITeS, witnessed the highest consolidation, capturing over 40% of volumes

Corporate India's deal tally, including M&As as well as private equity, amounted to $60.5 billion driven by big-ticket consolidation and the outlook remains bullish for this year, says a report.

According to assurance, tax and advisory firm Grant Thornton, there were 1,147 deals (M&A and PE) worth $60.54 billion last year.

In 2016, there were 1,485 such transactions worth $57.85 billion.

"This momentum was largely driven by big-ticket consolidation across sectors as companies divested distressed assets in an effort to reduce debt. On the other hand, corporates with strong balance sheets drove acquisitions to capture the market share and increase competitiveness," Grant Thornton India LLP Partner Prashant Mehra said.

On the merger and acquisition (M&A) front, the year saw 411 deals valued at $40 billion, continuing the declining trend after peaking in 2015. The fall in the deal tally is mainly due to the absence of multi-billion-dollar deals.

The telecom sector led the M&A deal activity in terms of total deal values, with six deals in the $100-million club, which cumulatively contributed to $25 billion, capturing over 60 per cent of total M&A deal values.

While core sectors like banking and pharma also garnered big ticket deals contributing 14 per cent to deal values. Tech sectors, including start-ups and IT & ITeS, witnessed the highest consolidation in 2017, capturing over 40 per cent of volumes.

Meanwhile, Indian PE activities recorded a growth of over 45 per cent over 2016 with deal values clocking $20.3 billion from 736 investments, recording the highest yearly investment value so far with more big-ticket investment rounds as compared to 2016.

"With political stability continuing, economic reforms on a fast pace and macro-economic factors looking positive, 2018 will perhaps be one of the best years for M&A with transaction activity closing at an even higher level than 2017," Mehra said.