India Inc's Jan-Oct M&A deal tally hits USD 32 bn: Thornton

Corporate India's merger and acquisition activity witnessed significant surge in October with transactions worth USD 4.5 billion, taking the total deal tally to USD 32.55 billion in the first 10 months of the year, says a report.

According to assurance, tax and advisory firm Grant Thornton, merger and acquisition (M&A) deal value grew 48 per cent on an year-on-year basis in October with increased focus on domestic and outbound deal activity.

There were 44 M&A transactions worth USD 4.57 billion in October this year, while in the corresponding period last year there were 55 such transactions worth USD 3.09 billion.
 

Going forward the deal outlook looks bullish.

"While consolidation in core sectors will continue to drive domestic M&A, and perhaps PE money will create the drive, there is significant transaction activity expected in outbound M&A as well," Prashant Mehra, Partner at Grant Thornton India LLP, said.

"Though there is already fair traction in outbound activity, this should be further escalated by the fact that the global financial gloom has thrown key assets up for acquisition at reasonable valuations and the Indian corporate will probably take advantage of that," Mehra said.

One of the most significant and big-ticket deals in October was the merger of Makemytrip and Ibibo, which is estimated at USD 1.8 billion. E-commerce sector led the M&A deal activity by contributing over 41 per cent of the total value.

In volume terms, Startups continued to lead the M&A deal and the segment contributed 36 per cent of total deal volumes, with increasing consolidation in the enterprise applications and infrastructure space.

October also witnessed some big ticket deals in sectors such as pharma, healthcare and biotech, IT & ITeS and banking & financial services.

Following the uptick in October, the January-October deal tally stood at USD 32.55 billion, registering a jump of 35 per cent.

"Big ticket transactions led to robust growth in M&A values, with nearly 60 per cent being driven by seven deals in the billion dollar club and 10 deals valued more than USD 500 million," the report said.