M&A deals in 2020 spike 33% to $36.9 billion

Deals cut by Reliance Industries helped overall mergers and acquisitions (M&AS) activity grow 33 per cent in 2020 to $36.9 billion, a report has said. The number of deals came down to 357 from the 443 in 2019, indicating a surge in average ticket sizes, the report by advisory firm Grant Thornton said. It pointed to the combined $10.1-billion stakebuy in Reliance Jio by Facebook and Google as an illustrative case.

The year also saw nine other deals value over $1 billion each, it said, adding that the top deals accounted for nearly two-thirds of the overall activity. There were 35 deals of over $100 million but under $1 billion, down from 47 in the year-ago period, it said.

Cross-border deal volumes fell 19 per cent compared with the previous year but the deal values jumped two times over 2019 to $21 billion, it said.

Indian firms with strong balance sheets have shaken off the shock from the pandemic to chase overseas acquisitions, coming back strong after recording the lowest quarterly deal volumes in the second quarter of 2020 since 2011, it said. Crossborder transactions between India and the US dominated in both the inbound and outbound segments.

Tractors sales grew nearly 48 per cent year-on-year (YOY) in January to 87,579 units, including 9,234 exports, driven by an expansion in rabi acreage, high reservoir levels, and more liquidity in the hands of farmers.

In January, retail numbers showed that tractor segment was the only vertical to be in the green (11.14 per cent growth), according to the Federation of Automobile Dealers Associations.

Month-on-month, the sales have increased after two months of decline. Data from the Tractor Manufacturers Association shows sales in October 2020 stood at 123,883 units, including 8,728 exports, highest since 2018. However, the sales dropped in November and December to 89,530 units and 71,740 units, respectively. In January, sales picked up again with 87,579 units being sold.

Mahindra & Mahindra’s Farm Equipment Sector reported a 50 per cent rise in domestic sales in January to 33,562 units from 22,329 units a year ago. Exports grew 55 per cent to 1,216 units from 787. Overall sales in January rose 50 per cent to 34,778 units in January 2021 from 23,116 units last year. Hemant Sikka, president (farm equipment sector) at Mahindra & Mahindra, said the demand was expected to remain robust.

Escorts Agri Machinery Segment sold 9,021 tractors, its highest January sales and registering growth of 48.8 per cent YOY. Domestic tractor sales in January 2021 stood at 8,510, a 45.6 per cent rise YOY. Company’s Chairman and Managing Director Nikhil Nanda said: “Agriculture demand for tractors and farm mechanisation is witnessing a continuous growth. We are hopeful of a sustained momentum as we see strengthening in farm and rural economies.”