M&As likely to gain traction as more bankruptcy cases go to NCLT

In terms of actual deals, distressed M&As accounted for a nominal 3%of M&A volumes, with just 21 out of a total 623 deals closed since 2017

Over the last two calendar years, distressed mergers and acquisitions (M&A) in India have topped $14.3 billion, or 12 per cent of the total M&A value. The biggest was Bhushan Steel ($7.4 billion) followed by Reliance Communications ($3.7 billion) and Fortis Healthcare ($1.2 billion). Nearly $10 billion of these deals were closed in 2018. In terms of actual deals, distressed M&As accounted for a nominal 3 per cent of M&A volumes, with just 21 out of a total 623 deals closed since 2017. Of these, 67 per cent was classified as “direct” where the asset itself was distressed; the rest were “indirect” — the parent was in distress. Such M&As are expected to gain traction as more bankruptcy cases go to the National Company Law Tribunal.