Tepid M&A activity in Jul-Sep; YTD deal kitty at record high

New Delhi: Corporate India's merger and acquisition (M&A) activity in September quarter stood at USD 2,142 million, down 81 per cent in value terms over last year, largely owing to GST impact and lingering effect of demonetisation, says a report.

However, in January-September, M&A activity clocked in USD 33 billion, recording a promising 22 per cent growth as the year to date (YTD) saw increasing domestic consolidation with deals like Vodafone-Idea, PropTiger-Housing.Com, among others.

According to assurance, tax and advisory firm Grant Thornton's latest Dealtracker report, in July-September there were 118 M&A transactions worth USD 2,142 million, while in the year-ago period, the deal count stood at 139 and the value at USD 11,221 million.

Absence of big ticket transactions in the said quarter drove transaction values to the lowest in the last 32 quarters.

The September quarter recorded only six transactions valued at and above USD 100 million as compared to 14 deals in the year-ago period, of which three were billion-dollar deals, the report noted.

"The M&A deal value reached a record high at USD 33 billion in the YTD as compared to USD 27 billion in the corresponding period last year," Grant Thornton India LLP Partner Prashant Mehra said.

Mehra added :"This was driven by higher consolidation witnessed in the domestic segment as home-grown companies chose the inorganic route to generate growth with around 190 deals worth USD 28 billion".

On the other hand, cross-border deal activity witnessed a declining trend both in terms of deal values and volumes. However, cross border transactions more than halved to USD 5.2 billion over the corresponding period last year.

January-September, 2017 recorded four deals in the billion dollar club and 58 deals valued at and over USD 100 million, together contributing around 84 per cent of the total deal values.

"Attracted by the long-term potential in the country due to improving economic conditions, companies are increasingly exploiting opportunities in the emerging Indian market, particularly those in the telecom and e-commerce sectors," the report said.