India Inc announces M&A deals worth USD 25 bn in May: Report

Corporate India announced merger and acquisition deals worth USD 25 billion in May, significant jump over the same period last year thanks to the USD 16 billion Walmart-Flipkart deal, says a report.

According to assurance, tax and advisory firm Grant Thornton's latest Dealtracker, there were 46 transactions worth USD 25,656 million in May this year, as against 35 deals worth USD 897 million in the year-ago period.

The Walmart-Flipkart deal also marks the biggest acquisition in the e-commerce space and Walmart's biggest overseas deal. This deal alone contributed to 62 per cent of total M&A values for the month.

"Large inbound transactions are an indication of the rising confidence among the global fraternity about the size of the Indian market and its importance in becoming a visible player in the global community; this trend is expected to trigger more inbound transactions and also consolidation in the domestic market for better visibility to the global businesses," said Pankaj Chopda, Director, Grant Thornton India LLP.

Chopda further noted that the conclusion of the first transaction under the Insolvency and Bankruptcy Code (IBC) Act will act as an accelerator for other ongoing transactions. Manufacturing, banking and financial services, e-commerce, IT and ITeS and healthcare sector will be the focus sectors for M&A transactions.

Following the significant uptrend in May M&A transaction tally, the M&A deal tally for the first five months of this year swelled to USD 63 billion, the report noted.

For the period between January and May there have been 204 transactions worth USD 63,328 million, while in the same period last year, there were 169 such transactions worth USD 30,529 million.

"M&A values recorded a healthy two-fold increase year-on-year in the deal values. This was primarily on account of revived domestic and cross-border deal activity, witnessing an increase of over six times in deal values," the report noted.

There has also been significant uptick in big ticket deals so far this year. The period between January and May registered 10 deals in the billion-dollar category and 24 deals valued USD 100 million or above each.

Among other major sectors, the start-up sector led the deal volumes, capturing a 17 per cent share, garnering USD 36 million. The fintech sub-segment attracted investors' attention.

The manufacturing sector witnessed three billion-dollar transactions, while the transport and energy sectors inked deals worth over USD 100 million, the report noted.