In its half-yearly review of Investment Banking and Private Equity activities in India for January-June 2019, Refinitiv said the target India M&A stood at $38.3 billion, down 53.2 per cent from the same period last year. Total cross-border deals slowed down as India’s inbound M&A activity fell 64.5 per cent from a year ago to reach $14.3 billion.
The United States, Japan and China accounted for 26.3 per cent, 12.3 per cent and 10.5 per cent over overall deals by value, respectively, of India’s inbound activity. Outbound M&A transactions declined 42.6 per cent from the same period last year and totalled $1.7 billion. Domestic M&A activity also dropped 42.1 per cent in value compared to the first half in 2018 and totalled $24 billion.
Most of the deal making involving India was in the financial sector, which attracted $13.7 billion, up 7.2 per cent from a year ago and captured 33 per cent of overall deal value. The top two deals in this space, worth above $1 billion, included Bandhan Bank Ltd’s pending merger with Gruh Finance Ltd for a total of $3.17 billion (Rs 22,012 crore) in a stock swap transaction. The deal is the largest-ever transaction in the Indian financials sector.
Power Finance Corp Ltd’s acquisition of majority interest in Rec Ltd (Rural Electrification Corporation), from Government of India, for a total of $2.101 billion (Rs14500 crore) was the other billion dollar deal. Energy and Power accounted for 13.5 per cent of the overall deal value, at $5.6 billion, down 54.5 per cent from the first half of 2018. High Technology rounded up the top three industries with 12.7 per cent market share and stood at $5.3 billion, up by as much as 270.4 per cent from a year ago.
JM Financial Group currently leads the announced M&A league tables, with $3.8 billion in related deal value, capturing nine per cent of overall deal value. Kotak Mahindra Bank Ltd and Ambit Corporate Finance rounded the top three with 8 per cent and 6.2 per cent share, respectively.
Private equity investments in India grew in value to $2.77 billion during the quarter ended June, 2019, in 133 deals from $2.68 billion in 113 deals during the same period last year. However, on a sequential basis, there was a decline from $5.84 billion during the first quarter of calender year 2019, in 137 deals. Seven funds raised $349.55 million during the quarter, compared to six that raised $458.24 millon in the year-ago quarter.
Top PE investments in India between January 1, 2019 to June 30, 2019, include $1.87 billion investment by Brookfield Asset Management Inc into Pipeline Infrastructure Pvt Ltd, followed by $735.12 million investment by Carlyle Investment Management LLC into SBI Life Insurance Company Ltd and $451.63 million by Carlyle, Fosun International, Soft Bank Investment Advisors.
On the investment banking activities, the country has seen $522.9 million generated during the first half of the year, a 10.8 per cent increase from the same period last year and saw the highest first period since the record set in the first half of 2017 ($647.7 million). Debt Capital Market (DCM) underwriting fees totalled $135.1 million, up 98.3% from a year ago and witnessed the best-ever first half period since records began in 2000. Equity Capital Market (ECM) underwriting fees reached $103.4 million, a minimal 0.9 per cent increase from the first half last year. Syndicated lending fees also grew 11.0% from the comparative period last year and generated $150.6 million.
India equity capital markets (ECM) reaches four-year high, raising $13.2 billion so far this year, up 28.7 per cent in proceeds from the comparable period in 2018, and the highest first half period since 2015 ($13.7 billion).
Initial public offerings (IPO) by Indian companies has also declined by 58.9 per cent to $1.5 billion compared to the same period last year. Morgan Stanley currently leads the ranking for India’s ECM underwriting with $1.8 billion in related proceeds and 13.9 per cent market share. Bank of America Merrill Lynch is in second place, capturing 11.3 per cent market share, then ICICI Bank Ltd at third place with 10.4 per cent market share.