Mergers and acquisitions by Indian firms witnessed a significant slowdown in the quarter ended March this year. The volume of deals plunged 75 per cent over the last year but the deal tally could pick up in coming days driven by the governments initiative to attract FDI,says a report.
Total M&As were at $5 billion in the quarter,down 75 per cent from $18 billion in the same period of last year. However,excluding internal mergers and restructuring M&As,deal values were up 14 per cent as compared to Q1 2012,Grant Thornton India,assurance,tax and advisory firm,said in a report.
The private equity business was also subdued during the period. The quarter saw 90 private equity deals contributing to $1 billion of deal value. We witnessed relative muted PE activity in Q1 2013 with values down by 39 per cent as compared to Q1 2012 and volumes down by 26 per cent during the same period, it said.
Raja Lahiri,partner,Transaction Advisory Services at Grant Thornton,said,Given the FDI regulatory changes in sectors and Governments push to attract FDI,we believe that M&A deal activity should pick up in this year. As far as private equity is concerned,we could expect moderation in overall deal activity. However,pressure on PE funds to exit would trigger deal momentum on PE secondary transactions and we are already seeing some action in this segment this year.
The decline in deal activity was possibly driven by interplay of factors given the global economic weaknesses along with slowness in growth in Indian economy,as well as the pressure on liquidity. Pharma and healthcare space dominated M&As in the quarter. Mylan Inc Acquired Agila Specialties Pvt Ltd (Stridess injectable business) for $ 1.8 billion,which was the top deal for the quarter
GIC invested $150 million in Greenko which was the largest PE deal in the quarter demonstrating PE interest in renewable energy sector.