M&A Activity Rises 3-Fold In January Amid Increasing Consolidation
Activity in the private equity space continued to decline in January.
The year 2017 started on a bullish note for merger and acquisition (M&A) activity in India, with a near three-fold increase in deal values and a seven percent rise in deal volumes in January, according to assurance, tax and advisory firm Grant Thornton India LLP.
Forty-five M&A deals worth $2,364 million were signed in January this year. In January 2016, there were 42 such transactions amounting to $827 million.
The rise in both deal value and volume was primarily on account of big ticket consolidation in the domestic deal activity, the report says.
However, activity in the private equity space continued to decline. Around 80 transactions worth $6,50,000 were signed during the first month of 2017, which was a 40 percent drop compared to the year ago period.
The rise in M&A activity was led by the domestic M&As, which contributed around $1.6 billion of the total activity. Activity in this space was led by the energy and natural resources segment with deals worth $1.3 billion being signed. The $1.19 billion deal between state-run Oil and Natural Gas Corporation Ltd (ONGC) and Gujarat State Petroleum Corporation (GSPC) was one of the leaders in this space.
Deal volumes were led by the startup industry which contributed to 22 percent of the total volumes. The rise was led by an increasing consolidation in the discovery platform space. The startup space also led the activity in the private equity space with deals worth $1,80,000 followed by the media and entertainment space which saw activity worth $1,20,000. Warbug Pincus' 14 percent stake buy in PVR Ltd. was the top private equity deal of the month.
Cross border activity saw nearly equal contributions from inbound and outbound activities with deals worth half a billion being signed.
Other Key Highlights
- Overall deal activity witnessed a sharp decline month-on-month due to a 74 percent fall in Private Equity values
- Deal volumes increased 15 percent month-on-month.
- January 2017 saw six big ticket deals valued at over $100 million compared to four in December 2016.
- Sectors like pharma, healthcare and biotech, infrastructure management also saw deals worth $100 million during the month.