M&A deals in Jan-Nov drop 27% to $82 b

The Hindu Business Line - - NEWS -

Post­ing a de­clin­ing trend from the pre­vi­ous year-ago pe­riod, In­dia’s to­tal M&A deals recorded $2.3 bil­lion in value terms from 27 deals in Novem­ber this year, im­pacted mainly by a drop in big ticket trans­ac­tions.

This is a 27 per cent de­cline in value and a 31 per cent drop in vol­ume from the com­pa­ra­ble year ago month.

In Novem­ber 2017, In­dia recorded M&A deals worth $3.2 bil­lion in value from across 39 deals, ac­cord­ing to Grant Thorn­ton’s M&A Deal­tracker.

This di­min­ish­ing trend can be at­trib­uted to an in­creased un­cer­tainty on ac­count of volatile crude oil prices, delays with re­spect to clo­sure of IBC cases (In­sol­vency and Bank­ruptcy Code, 2016) and de­pre­ci­at­ing ru­pee, the tax and ad­vi­sory firm said.

Cross-border ac­tiv­i­ties

For the Jan­uary-Novem­ber pe­riod, M&A deal val­ues dou­bled to $82 bil­lion, up 12 per cent on ac­count of re­vived do­mes­tic and cross­bor­der deal ac­tiv­ity.

“Deals ag­gre­gat­ing to $1.2 bil­lion were re­ported un­der do­mes­tic and cross-border trans­ac­tions each in Novem­ber 2018. Al­though, the num­ber of cross-border deals re­ported in Novem­ber 2017 and 2018 re­mained con­stant at 13, the deal ticket size in Novem­ber 2018 pulled down the over­all deal val­ues. Trans­ac­tions of fi­nan­cially stressed as­sets, diver­si­fi­ca­tion of non-core busi­ness and fo­cus of spe­cific mar­ket in iden­ti­fied ge­ogra­phies were the key drivers for trans­ac­tions dur­ing the month,” Pankaj Chopda, Di­rec­tor at Grant Thorn­ton In­dia, said.

“The writ­ing is on the wall that 2018 will be record­break­ing both in terms of deal value and deal vol­umes, but the closing may not be so grand,” he added.

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