India Inc’s merger and acquisition (M&A) transactions more than doubled in value terms to $35.84 billion, during the first half of 2017, says a report.
According to tax and advisory firm Grant Thornton, value of M&A deals stood at $15.82 billion, during the first six months of 2016. During January-June 2017, a total of 198 M&A deals worth $35.84 billion took place. However, this deal volume is less compared to 260 transactions in the same period year-ago. “India Inc’s M&A deals witnessed a whopping 127 per cent year-on-year increase in the deal value amounting to $35.8 billion in first half of 2017, in spite of volumes declining by 24 per cent driven by Vodafone-Idea merger estimated at $27 billion,” the report said.
“However in the absence of this mega merger, the values recorded 44 per cent dip compared to first 2016," it added. According to the report, outbound deal values decreased 3.9 times to $801 million in the first six months of the current year compared to same period year-ago, which indicates a cautious domestic investor sentiment amidst an uncertain global economy.
Meanwhile, the PE deals also recorded over 27 per cent increase to $7.59 billion in investment values, for the period under review. However, PE volumes declined by 17 per cent indicating increased average ticket size, Grant Thornton said. Start-ups continued to dominate the PE investment, both by values (16 per cent) and volumes (60 per cent) along with core sectors like banking, telecom and real estate receiving big-ticket investments of over $100 million.
Giving an overall view, Grant Thornton partner Prashant Mehra said: "Restructuring efforts by large debt-ridden companies have provided opportunities for investors and other players to carry out transactions at attractive valuations. The consolidation among players in sectors like telecom, technology and energy was the key growth driver for transactions in first half of 2017".
"Cross-border activity has witnessed a downward trend from the highs it had reached during the first half 2011. The reason behind this is really the uncertainty around the government policy which has made foreign investors cautious," Mehra added.
Besides, the report also showed that 10 initial public offers (IPOs) amounting to nearly $1.4 billion, so far this year, marking the highest ever amount raised through such issuances since the first half of 2010.