M&A activity down 31% in Sept quarter to $13.5 bn

India Inc witnessed a significant jump in merger and acquisition deals in the September quarter this year, with 225 inbound and outbound transactions worth around $13.5 billion recorded during the period.

In the corresponding period last year, when the world was coming out of an economic slowdown, India had witnessed 251 M&A deals worth $4.9 billion, a report by consultancy firm Ernst & Young said.

However, in terms of the value, the mop-up from M&A deals in the September quarter was 31 per cent lower than in the April-June quarter, even though the total number of deals increased from 203, Ernst & Young's report said.

The E&Y report noted that since the majority of the deals, around 82 per cent, were worth less than $50 million, the total deal value did not increase despite a rise in the number of deals.

However, in what is representative of the interests of the world in India, especially the domestic demand-driven economy aspect, a whopping 75 per cent of the transacted value, or $10.1 billion, in Q2 was inbound, E&Y added.

"India's relative resilience to the global economic downturn, coupled with the country's expected growth potential, makes it a very attractive target destination," the report said.

On a sectoral basis, oil and gas accounted for the bulk of the M&A deal value during the review period, courtesy UK-based Vedanta Resources' acquisition of a controlling stake in Cairn Energy for $8.5 billion. Other high value transactions completed during the period include Japan-based JFE Steel's acquisition of a 14.99 per cent stake in JSW Steel for around $1 billion.