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Two investment banking outfits, Evercore Partners, which advised Sun Pharma along with Citibank, and GCA Savvian Advisors, which advised Japanese drug major Daichi, have made it to the top 10 list thanks to the Sun-Ranbaxy deal. Transactions were expected to slow down in December due to year-end holidays, bankers said.
Sun Pharma’s blockbuster acquisition of Ranbaxy for $3.9 billion was the biggest M&A transaction for the current year while mobile phone spectrum acquisitions by Vodafone, Bharti Airtel, Reliance Communications and Idea Cellular were among the top 10 transactions of the year. Sun Pharma’s acquisition of Ranbaxy is awaiting approval by the Competition Commission of India.
Bankers gave credit to improved business sentiment in India after Narendra Modi took over as Prime Minister. “The investment climate has certainly improved and private investors are keen to invest here. India is a growth capital market and the investment rate is linked to capital expenditure on the ground. It is important to note that a lot of capacity was lying idle for the past two or three years when the economy slowed down and capacity expansion will take place only when capacity utilisation improves. We expect things to improve from here,” said J M Trivedi, head of Actis in India.
The completion of the United Spirits transaction by Diageo announced in 2012 also made it to the top five M&A deals of the year. Many assets were sold this year by highly leveraged like the Jaypee group, which sold its two hydro companies in Himachal Pradesh to JSW for $1.58 billion.
The massive valuation of e-commerce companies like Flipkart was another big theme of the year with the online retailer company selling its shares to a clutch of private equity companies, including Tiger Global and Naspers, in July for close to $1 billion (Rs 6,200 crore). The investments by the private equity companies provided a valuation of $7 billion to Flipkart even as rival Amazon decided to invest another $2 billion in its India operations in September.
Bankers say this year the Adani group emerged one of the top buyers by buying Dhamra Port from Larsen & Toubro and the Tatas for close to Rs 5,500 crore and two power projects from the Lanco and Avantha groups. Adani bought Lanco’s Udupi power project for Rs 6,000 crore and Avantha’s Korba power project for close to Rs 4,200 crore.
On the outlook for the next year, bankers said many groups with big debts like Jaypee, Lanco and Leela Hotels would continue to sell assets either to better leveraged companies or to private equity firms.
