India Inc's April M&A deal tally rises 8-fold to $19 bn: Report

There were 40 M&A deals in April this year worth $19,142 million, a 788% jump in deal value, and 38% rise in deal volume

India Inc's mergers and acquisitions (M&As) tally rose eight-fold to $19.1 billion with 40 transactions in April, making it the highest monthly deal value recorded after March 2017, says a report.

According to Grant Thornton, relative easing of regulatory ecosystem and consolidation across sectors have significantly driven the deal activity in April this year, sealing deals (M&A and PE) worth $21 billion across 119 deals.

"April saw deals worth $19.1 billion across 40 transactions, marking the highest monthly values recorded after $23.8 billion recorded in March 2017," said the report released today.

There were 40 M&A deals in April this year worth $19,142 million, a 788 per cent jump in deal value, and 38 per cent rise in deal volume, it said.

With this, the total M&A deal value stood at $37,672 million so far this year.

The deal value grew exponentially compared to April 2017, driven by two billion-dollar deals and 10 deals valued at and above $100 million each, accounting for 97 per cent of the total M&A deal values. While April 2017 witnessed only six deals valued over $100 million.

"Deal activity witnessed a spurt in April. Internal and global group restructuring plans, consolidation and sale and merger of non-core businesses seem to be the underlying themes for the key M&A transactions," said Pankaj Chopda, Director, Grant Thornton India LLP.

Compared to March this year, April bounced back registering a whopping 11.8 fold increase in deal values on the back on of two billion-dollar deals, while volumes saw a 29 per cent month-on-month increase, the report said.

India continues to see a strong growth in deal activity, with the year so far recording 442 deals (M&A and PE) worth $44 billion, a 26 per cent increase in deal values, driven by a relatively stable economy, liberalisation of government policies and a continued interest from strategic and financial investors, the assurance, tax and advisory firm said.

M&A values recorded a robust 27 per cent increase y-o-y in the deal values. This was primarily on account of revived domestic and cross-border deal activity, witnessing an increase of over three times in deal values.

The year so far has registered six deals in the billion-dollar category and 21 deals valued at and over $100 million each. Compared to two billion dollar deals and 17 deals valued at and above $100 million each in YTD 2017.

Telecom, energy, banking, IT and ITES and manufacturing sectors led the deal activity, capturing 92 per cent of the total deal values. On the other hand, start-up and IT and ITES sector dominated the deal volumes with 35 per cent share.

Telecom sector led the deal activity, accounting for 77 per cent of the total deal value. This growth was driven by Bharti Infratel's merger with Indus Towers valuing at USD 14.6 billion, creating the largest tower company in the world outside China. This merger alone contributed to 76 per cent of total M&A values.

"Given that in the four months ended April 2017 the value of deals reported is already close to 75 per cent of the annual deal values reported in 2017, we expect the deal momentum to continue. Further, given that 2019 will be an election year, we expect the government to further accelerate policy reforms, which will further fuel the deal momentum," Chopda added.