Corporate India’s deal tally increased last year, driven by consolidation in telecom and record private equity equity investments. The outlook for this year remains bullish.
There were 1,147 deals worth $60.54 billion last year—both mergers and acquisitions and private equity transactions, assurance, tax and advisory firm Grant Thornton said in a report. That compares with 1,485 such deals worth $57.85 billion in 2016.
“This momentum was largely driven by big-ticket consolidation across sectors as companies divested distressed assets to reduce debt,” Grant Thornton India LLP Partner Prashant Mehra said. “On the other hand, corporates with strong balance sheets drove acquisitions to capture the market share and increase competitiveness.”
The year saw 411 mergers and acquisitions valued at $40 billion, continuing the declining trend after peaking in 2015. The fall in the deal tally is mainly due to the absence of multi-billion-dollar deals.
The telecom sector led the M&A deal activity, with six deals in the $100-million club which cumulatively contributed $25 billion—over 60 percent of total M&A deal values.
Core sectors like banking and pharma also garnered big ticket-deals contributing 14 percent to the total values. Tech sectors including startups and IT & ITeS witnessed the highest consolidation in 2017, capturing over 40 percent of the volumes.
Indian private equity activity recorded a growth of over 45 percent over 2016 with deal values clocking $20.3 billion from 736 investments, recording the highest yearly investment value so far with more big-ticket investment rounds as compared to 2016.
“With political stability continuing, economic reforms on a fast pace and macroeconomic factors looking positive, 2018 will perhaps be one of the best years for M&A with transaction activity expected to close at an even higher level than 2017,” Mehra said.