Thought Leadership

Monthly Dealtracker – May 2020

We are pleased to present the Monthly Dealtracker, which captures the deal activities in India during May 2020.

Deal summary – May Volume Value (USD million)
Year 2018 2019 2020 2018 2019 2020
Domestic 26 22 10 7,316 1,995 45
Cross-border 19 9 7 18,451 1,403 32
Inbound 10 5 1 18,326 889 5
Outbound 9 4 6 125 514 27
Mergers and internal
restructuring
1 2   5 10  
Total M&A 46 33 17 25,772 3,408 77
PE 55 48 82 1,185 1,149 5,585
Grand Total 101 81 98 26,957 4,557 5,662

The spate of private equity (PE) investments in Jio Platforms pushed overall deal scenario in May to USD 5.7 billion across 98 transactions. Sans the four PE investments in Jio Platforms aggregating to USD 4.6 billion, the adjusted monthly deal scorecard reflects a degrowth of 77% and 88% in deal values compared with May 2019 and April 2020, respectively. In volume, even excluding the aforesaid four PE transactions, May achieved 16% and 25% growth compared with May 2019 and April 2020, respectively.  

May 2020 reported 17 merger and acquisition (M&A) transactions, which is equal to the number of transactions reported in April 2020 and about 50% less compared with May 2019. However, absence of large ticket transactions and non-reporting of values of some key transactions,
indicated a fall of approximately 98% and 99% in deal activity, as compared with May 2019 and April 2020, respectively. While the decline in activity was expected due to the current pandemic, the actual result can be a signpost of the near-term deal scenario. Key M&A deals, which do not have a reported value, include Welspun’s acquisition of the Panipat Toll Road project and ITC’s acquisition of Sunrise Foods Limited.

Sector focus: PE/VC investments in May 2020 outperformed April 2020 and May 2019, both in terms of value and volumes. The month also witnessed PE investors taking controlling stake through an IBC transaction and Carlyle acquiring majority stake in an animal healthcare company. There were 66% transactions in start-ups while technology appeared to be the central theme with 80% transactions, including fin-tech, edu-tech, health-tech, retail-tech and telecom companies. As the pandemic impacts offline businesses, companies providing technology solutions to such businesses will attract transactions.

Outlook: The lockdown period has starved businesses of cash, therefore, the appetite for transactions is much more than ever. However, in these uncertain times, all stakeholders are decoding what the new normal would be and the expectation out of it - stability, growth, return or anything else.