Skip to main content

DEALMAKERS EYE BIG PUSH



The Indian mergers and acquisitions market is likely to see increased momentum post elections and experts believe overall deal values in India could exceed USD 30 billion this year if Lok Sabha polls result in a stable government at the Centre. Post-elections, the pace is expected to be greater for inbound deals, which have been largely pushed back for many months now for want of better clarity on the policy stance of new government, experts said. The deal street in India remained moderate during the first two months of the year with only 170 deals worth USD 4.2 billion as cross-border activity remained tepid, as per Grant Thornton data. There is a strong sense in the market that the situation would improve post general elections provided the new government's economic policies encourage FDI and make doing business in India easier. 
Sanjeev Krishnan, Leader - PE & Transaction Services - PwC India said "if there is a stable government (BJP or any other), economic reforms would be back on the Government's agenda". "Then India would be looked at much more positively by both strategic and PE investors. "In terms of numbers, at the minimum, I expect overall deal values in India to exceed USD 30 billion this year and Private Equity investments to exceed USD 12.5 billion in 2014 -15. However, if a weak or significant coalition dependence emerges, the numbers could be much lower," he said. Echoing similar sentiments, Girish Vanvari, co-Head of Tax, KPMG in India said: "Election outcome can be a game changer. If a stable government emerges at the Centre and the new government takes steps to demonstrate stability of tax and regulatory regime in the country, it would restore the much- needed investor confidence." Vanvari further said that post elections "we could also see the number doubling from year on. Take an example of the recently announced Sun Pharma-Ranbaxy deal, upwards of USD 4 billion in one deal itself and if there are 4-5 deals like this, imagine where the numbers can be." The increasing political uncertainty over the past one year alongwith a fear of a fractured mandate and policy paralysis perception have resulted in creating a cautious approach among strategic players, experts believe. "The year 2014 is being anticipated to be a big year for M&As, especially for big-ticket deals. However, most of it is expected to take off post the general elections," Sumant Sinha, Chairman and CEO, ReNew Power said. Consumer, healthcare, metals, real estate and telecom sectors might see the biggest share of deals taking place, he added.
However, Grant Thornton India LLP Partner Harish HV believes deals are independent of economic cycles. Larger deals tend to happen when the financial markets are buoyant and money is easy to raise. In weak market conditions, capacity consolidation tends to happen. "We expect that the deal market will continue its present momentum and don't expect a dramatic change to the Deal Street based on elections," he said. "If the economic policies are such that it encourages FDI, we would see inbound deals. If the rupee appreciates and fund raising becomes easier due to buoyant market conditions, we can see more outbound deals." According to Grant Thornton, in 2013 there were a total of 500 deals worth around USD 28 billion, much lower than the deal volume shown in the previous two years. In 2012, there were 598 deals worth USD 35 billion, while in 2011, there were 644 transactions worth USD 45 billion.

Comments

Popular posts from this blog

BIRLAS ENTER TOP LEAGUE WITH $50 BILLION M CAP

The Aditya Birla group has entered the top valuation league with a market cap of over USD 50 billion post listing of financial services arm Aditya Birla Capital (ABCL), but Tatas remain on top with over USD 132 billion.
The combined market valuation of the Kumar Mangalam Birla-led listed companies stood at Rs 3,42,354.87 crore (USD 53.5 billion) at the end of Friday's trade.
Among various listed companies of the group, UltraTech Cement's valuation stood at Rs 1,10,097.70 crore at the end of Friday's trade while that of Grasim Industries was Rs 76,881.73 crore.
The newly-listed Aditya Birla Capital's market capitalisation was over Rs 55,000 crore, Hindalco (Rs 54,607.09 crore), Idea Cellular (Rs 32,064.91 crore), Aditya Birla Fashion and Retail (Rs 13,155.73 crore) and Aditya Birla Money (Rs 547.71 crore).
Among Indian conglomerates, the Tata group remains on the top in terms of total valuation of listed firms with about Rs 8,46,567 crore (USD 132.5 billion).
There are 29 pu…

DHIRUBHAI ENJOYED IN WEALTH CREATION

Leading businessman Anil Ambani today said more than creating wealth for himself, his father late Dhirubhai Ambani derived greater happiness from creating wealth for masses. "If you ever asked what part of being an entrepreneur he (late Ambani) enjoyed the most, he would say, 'I enjoy creating wealth. But what I enjoy even more is in creating wealth for the people of the country,'" the Anil Ambani Group chairman said while addressing an industry event here. It can be noted that the late Ambani, who had a humble beginning as a primary school teacher's son in Gujarat, is regarded as the father of capital markets and the equity cult, who made millions of investors millionaires with the IPO of Reliance Textile Industries in 1977. A person who had put in Rs 1,000 then in the IPO is worth over a million today, going by the price of RIL. Stating that the launch of Kothari Pioneer Mutual Fund, which was country's first private MF in 1993, was his (Dhirubhai's) id…

BEAR GRIP ON INDIAN STOCK MARKET

RECORDS 1 WEEKLY FALL IN 6 WEEKS
Gripped by fear psychosis due to geo-political aftershocks, key stock market indices were on a sticky wicket for the fifth day today as both Sensex and Nifty fell over 1 per cent to hit their one-month lows. The sharp plunge left investors poorer by over Rs 95,000 crore as the market cap stood at Rs 1,27,08,846 crore. Risk appetite took a hit after the Economic Survey said achieving the high end of the 6.75-7.5 per cent growth projected previously will be difficult. This is markets' first weekly fall in six.
Weakness in the rupee against the American currency and lacklustre global shares dragged down the indices, too. The BSE 30-share Sensex remained in the negative zone and settled down 317.74 points, or 1.01 per cent, at 31,213.59, its weakest closing since July 4. The index had tumbled 794.08 points in the last four sessions. The NSE Nifty after cracking the 9,700-mark to hit a low of 9,685.55, finally settled lower 109.45 points, or 1.11 per cent…