India Inc sees M&A deals worth $15 bn in Jan as domestic deals gain pace

Corporate India's merger and acquisition (M&A) activity witnessed over six-fold increase in year-on-year deal value to approximately USD 15 billion in January, primarily on account of revived domestic deal activity, says a report.

In January this year, there were 47 M&A deals worth USD 15,137 million, while there were 45 such transactions worth USD 2,301 million in the same month of 2017, according to assurance, tax and advisory firm Grant Thornton.

The uptick in the deal momentum was primarily on account of revived domestic deal activity that witnessed over eight-fold increase in deal values.

January recorded three domestic deals valued over USD 1 billion accounting for 98 per cent of the total M&A deal values, the report said.

Meanwhile, cross-border deal values recorded over two-fold increase on account of three big-ticket transactions estimated and valued over USD 100 million.

"Deleveraging the asset holding companies and strengthening the market position appeared to be the motive for the large domestic/merger transactions," said Pankaj Chopda Director at Grant Thornton India LLP.

Chopda further said debt leveraging, insolvency proceedings and pressure to strengthen/retain market position will continue to drive M&A transactions in energy and natural resources, industrials and banking and financial services sectors.

The deal activity in January 2018 more than doubled at 47 deals from 20 deals as compared to December 2017.

On the other hand, values jumped 44 times over December 2017 on account of billion-dollar deals. January witnessed four deals in the billion-dollar club compared with December 2017, when nothing happened in this value bracket, the report added.

Energy & natural resources sector led the deal activity accounting for more than half of total deal value, while start-up sector led the deal volumes capturing 25 per cent share resulting on account of revived domestic investors' interest in the food tech space followed by fintech and on-demand services segments.