RIL's multi-billion-dollar deals help Morgan Stanley top M&A league table

The US-based bank has advised 25 transactions with values touching as much as $28 bn; BoFA is second in the chart

Thanks to the billions of dollars raised by Reliance Industries for its telecom arm, Morgan Stanley, the advisor to Mukesh Ambani company, is all set to top the M&A league table for the calendar 2020.  The US-based bank has advised 25 transactions with deal values touching a stagerring $28 billion.

As per statistics available till date, BoFA is second in the chart by advising deals worth $18 billion while EY is third in the league table with transactions worth $18 billion (see chart). Facebook, Inc's $5.7 billion investment in Jio Platforms, a subsidiary of Reliance Industries Ltd helped monetise the digital platforms of both companies and aid in deleveraging of RIL's balance sheet. At the same time, Reliance Retail, RIL's retail arm which announced acquisition of Future group companies, has also partnered with Facebook's WhatsApp to allow RIL's ecommerce business users to use the WhatsApp platform. 

Facebook's investment for a 9.99% stake in Jio Platforms is the single-largest FDI in the Indian telecoms and technology sector.

"Reliance's unprecedented blockbuster fund raising from Facebook and other investors during the peak of pandemic and pending acquisition of Future group companies are the top deals of the year and shows the appetite for deal making for Indian companies. We expect this trend to continue even  in the new year," said a banker close to the development.  

The RIL’s deal to acquire Future group of companies was announced in August-end for Rs 25,000 crore is still pending as its rival, Amazon has moved the court to stop the deal citing its own RoFR (right of first refusal) with Future group. The matter is currently pending in the court.

Bankers said acquisition of Piramal Glass by Blackstone, sale of DHFL and Reliance Capital assets will be the few large deals to follow in the coming months.

While the Adani group with a whopping Rs 31,250 crore deal is leading the race for DHFL, almost 60 companies have submitted their expressions of interest for Reliance Capital and/or its assets. Bankers said 18 companies are in the race for   Reliance General Insurance including Chrys Capital, J.C. Flower, Blackstone, KKR, CVC Capital Partners, and Bain Capital. Similarly, Reliance Nippon Life Insurance has received 16 bidders including Bain Capital, NIIF, Arpwood Partners, Dabur Investments, Bandhan Bank, and Multiples Asset Management.  

Tata group’s acquisition of online grocery retailer, BigBasket is another billion dollar plus deal which will be announced in the coming days.

Bankers said despite the Corona pandemic hitting Indian companies hard, the deal street remained busy throughout 2020 and will continue even in 2021. “We are expecting several transactions in the real estate sector as local companies will strive to sell their assets to reduce their debt. The NBFC segment and government’s disinvestment in key companies like BPCL and Air India will witness good response from investors,” said another banker.

Bankers said foreign companies will invest in India via infrastructure trusts route. Take for example, Brookfield invested Rs 25,215 crore in Tower Infrastructure Trust and the proceeds were used by RIL to retire its debt. The transaction was completed on September 1 and the units were listed on the BSE. In October, RIL filed its prospectus for its third InvIT which will hold Jio’s fibre optic network as its underlying asset. The personal entities of Ambani are the sponsor of the fibre co trust.

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