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Market Commentary
Indian Market saw deals worth $23 bn in first half of 2014 - Grant Thornton Dealtracker Report
Posted On : 2014-07-19 01:27:03( TIMEZONE : IST )
The key highlights of the report are as follows:
In the first half of 2014, the Indian market saw deals worth USD 23bn (560 deals), up against USD 17.6 bn (460 deals) in YTD 2013.
- Strategic M&A (excluding internal restructuring) has shown highest level of activity since 2012 at USD 14.6bn (251 deals) in 2014, as against USD 11.5bn (228 deals) in 2013 & USD 8.3bn (155 deals) in 2012
- Inbound deals have increased, both in terms of value and volume while outbound deals have not witnessed too many big ticket deals, despite volume remaining consistent
- Private Equity has seen a significant uptick in volume, 40% higher than in 2013
- The year so far, there have been some large deals in the QIP space with the billion dollar QIP in SBI and 3 other QIPs of over USD 500mn each
Raja Lahiri – Partner at Grant Thornton India LLP (an assurance, tax and advisory firm) said, "With the new government in place and the 2014 Budget, the business optimism is high for Corporate India and this is demonstrated through the increasing M&A and PE deal action in first six months of 2014. In H1'2014, we saw US$23bn worth of M&A and PE deals (560 deals), as compared to US$17.6bn from 460 deals in H1'2013. This reflects 31% growth in value terms and 22% in volume terms. Top deal in H1'2014 is Sun Pharma's acquisition of Ranbaxy.
Sectors which are expected to see renewed deal activity include infrastructure, energy, consumer and financial services.
High governance standards have fetched premium pricing on deals and it is imperative for Corporate India to drive governance standards, some of which are covered by the new Companies Act. However, given the complexities of regulations as well as some recent corporate governance issues, robust due diligence is the need of the hour. We expect valuations to go up given the renewed business sentiments which in our view, would be both a challenge and an opportunity for dealmakers to close deals in 2014."
