India Inc's M&A deals at $31 bn in Jan-Nov: Grant Thornton

Deal momentum likely to see uptrend in coming months due to easing inflation, good growth numbers

Corporate India signed merger and acquisition (M&A) deals worth $31.16 billion in the first eleven months of this year, while transactions in November were valued at $3 billion, says a Grant Thornton report.

According to the assurance, tax and advisory firm, the January-November deal tally remained subdued with transactions worth $31.16 billion this year, while in the corresponding period last year it stood at $34.62 billion.

There were 47 M&A transactions worth $2.97 billion in November this year, witnessing a massive plunge of 58 per cent over the corresponding period last year, when deals worth $7.11 billion were announced.

The deal momentum is likely to see an uptrend in the coming months on account of easing inflationary pressures and good growth numbers.

"With inflation in control and GDP growth being revised to now end higher than anticipated, all necessary ingredients seem to be in place, for growth in deal activity as well," Grant Thornton India LLP Partner Prashant Mehra said.

"The recent FDI norms and the much awaited GST will perhaps be a game changer and will further accelerate the deal activity from an inbound investment, domestic M&A and PE perspective," Mehra said.

According to Grant Thornton, though domestic M&A deal activity remains subdued, cross border M&A deals have driven the growth in deal values.

"Cross border deal values increased by 26 per cent year-on-year, driven by 11 deals worth over $500 million and 27 deals worth over $100 million," the report said.

Sector-wise, telecom players lead with 40 per cent of the total deal value. Deals in banking and financial services increased after foreign JV partners raised stakes to 49 per cent after the relaxation of the FDI limit.

November also witnessed Reliance Communication's merger with Sistema Shyam Teleservices marking the first major consolidation in the Indian telecom industry since 2009.

Other major deals in November include Idea Cellular's pact with Videocon Telecommunications to buy its airwaves in Gujarat and Uttar Pradesh West for $517 million.

Japanese firm Nippon Life's acquisition of another 23 per cent stake in Reliance Life Insurance for $342 million was the other major deal during the month.