Monthly Dealtracker - April 2019

We are pleased to present the Monthly Dealtracker which captures the recent deal activities in India.

As anticipated, the deal turnout remained suppressed in April 2019. About 35 mergers and acquisitions (M&A) transactions and 80 private equity/venture capital (PE/VC) transactions aggregating to $0.7 billion and $3.8 billion, respectively, were reported in April 2019. Compared to overall deal statistics of April 2018, deal values shrunk by 79% and deal volumes reduced by 6%. However, excluding the $14.6 billion Bharti Infratel-Indus Tower transaction in April 2018, the shortfall in overall values will be about 36%, and 10% as compared to April 2017. Deal volumes witnessed marginal fluctuations.

M&A transactions experienced low traction in all three segments including domestic, cross-border and mergers. Key transactions for the month included Amazon’s investment for acquisition of the supermarket chain ‘More’, Infosys’s acquisition of Netherland-based mortgage administration services company of ABN Amro, and Reliance Jio’s acquisition of Haptik Infotech. These three transactions constituted 73% of the overall M&A deal values for the month. Absence of large-ticket merger transactions and/or non-closure of IBC transactions impacted the overall M&A transaction values.

Despite muted volumes, large ticket PE/VC transactions partially offset the shortfall in overall deal values. A $1.1 billion investment by Tata Group, GIC and SSG Capital Management was the major contributor to the 46% growth in PE/VC transaction values as compared to April 2018. Investments to acquire controlling stake continued to be the theme in key transactions.

Sector focus: Transactions in IT and ITES, and retail and consumer sectors were the key value drivers in M&A. Similarly, infrastructure management, retail and consumer, and banking and financial services were the key drivers for PE/VC transactions. Considering the transactions in the pipeline, energy and natural resources, and media and entertainment sectors, along with the aforesaid sectors are expected to make an impact.

Outlook: Considering May being the month of election results, the uncertainty in the deal landscape is expected to fade away soon. However, transactions to pare debt, closure of IBC-related transactions and transactions in pipeline indicate a silver lining for the rest of the year.