India Clocks M&A Deals Worth $9.8 Billion in July: Grant Thornton

New Delhi: India recorded 110 merger and acquisition (M&A) deals worth 9.8 billion dollars in July, which is three times the deal values but 10 per cent short of deal volumes as compared to June, according to a report by Grant Thornton India LLP.

However, compared to July last year, July 2019 recorded a declining trend both in terms of values and volumes.

“M&A transactions continued to witness a lacklustre deal activity on the back of failing to record big-ticket deals witnessed during July 2018. In addition, headwinds seen in the financial services space and slowdown in the core sectors have affected the M&A deal space,” said the report.

However, the emphasis of the Union Budget on liquidity concerns in the non-banking finance companies (NBFC) sector and constant efforts of streamlining the Insolvency and Bankruptcy Code (IBC) norm among others are likely to boost the M&A deal activity.

The tax and regulatory environment in India continues to be conducive for enhanced private equity (PE) deal activity, said the report. In particular, the liberalised external commercial borrowings framework widens the foreign source funding options for economically-distressed business units.

This has further added to heightening the private equity investments in India with the month recording the highest year-on-year values with an investment worth 5.5 billion dollars across 71 deals including the Brookfield-Reliance Jio Infratel deal worth 3.7 billion dollars, marking the single-biggest private equity deal in India.

While telecom, start-up, energy and infra sectors attracted high-value deals from both strategic and financial investors, IT, pharma and banking sectors remained active pushing the deal volumes during the month.

“Though the Union Budget has laid down a roadmap for growing the economy in a sustained manner with a focus on both urban and rural sectors, the impact on deal activity will depend on the measures and policies by the government to counter the slowdown, implement and promote growth-focused investment plans and impact of global economic trends,” said the report.

Source: SIFY