India Inc deal value drops 80% to $3 bn in Feb

Mylan's $1.8 bn buy out of the drug injectible business of Bangalore-based firm Strides Arcolab was the deal of the month

Total value of deals involving Indian companies plunged 80% year-on-year in February, although experts said the momentum will gather pace soon spurred mainly by aviation, media, retail and pharma sectors.

According to leading assurance, tax and advisory firm Grant Thornton, there were 70 transactions worth $3 billion, of which merger and acquisition (M&A) deals were worth $2.7 billion, while private equity transaction amounted to $0.3 billion, in February.

This represents a drastic decline of nearly 80.58% from the year ago period, when the deal tally stood at a whopping $15.45 billion.

"With the 2013 budget being done and Government's focus to control fiscal deficit and bring back growth, we expect deal momentum to pick up in 2013 hopefully with cross-border action coming back in sectors like aviation, media, retail, pharma etc," Grant Thornton India Partner, Transaction Advisory Services Raja Lahiri said.

In February, inbound deals, wherein foreign firms or their subsidiaries acquired Indian entities, were the flavour of the month. In February 2013 there were $1.99 billion worth of deals through 7 transactions as compared to $0.27 billion by way of 9 deals in the corresponding month of 2012.

The total value of outbound deals, where Indian companies acquire businesses outside India, in February 2013 was stood at just $0.07 billion through 4 deals as compared to $0.44 billion via 5 deals during the year ago period.

Value of PE deals amounted to $0.30 billion (29 deals) in February 2013 as compared to $0.70 billion (45 deals) in the same month last year.

US generic drug maker Mylan's $1.8 billion buy out of the drug injectible business of Bangalore-based firm Strides Arcolab was the deal of the month, followed by Webhelp SA's acquisition of HEROtsc from the Hero Group for a total consideration of $123 million.

Other major deals during the month were Varun Beverages' acquisition of Pearl Drinks-Bottling business for $73 million, Bharat Light & Power's buyout of DLF's wind turbine business in Gujarat for $51 million and Thomas Cook India's 74% stake acquisition in IKYA Human Capital Solutions for $47 million.

One the PE front, action was seen in the space of BFSI, pharma, IT, real estate and infra, the report said.