| Deal Summary- H1 | Volume | Value(USD Million) | ||||
|---|---|---|---|---|---|---|
|
Year
|
2017
|
2018
|
2019
|
2017
|
2018
|
2019
|
|
Domestic
|
16
|
27
|
22
|
593
|
262
|
379
|
|
Cross-border
|
16
|
11
|
21
|
761
|
926
|
860
|
|
10
|
10
|
9
|
565
|
918
|
544
|
|
|
6
|
1
|
12
|
196
|
8
|
316
|
|
|
Mergers and internal restructuring
|
2
|
1
|
705
|
5
|
||
|
Total M&A
|
32
|
40
|
44
|
1,354
|
1,893
|
1,244
|
|
PE
|
45
|
63
|
56
|
588
|
1,741
|
928
|
|
Grand total
|
77
|
103
|
100
|
1,942
|
3,634
|
2,172
|
The deal landscape continued to be slow in February 2019 due to the absence of large ticket transactions. The aggregate deal count and values for the month, though lower compared to the same period in 2018, were higher as compared to February 2017 and January 2019, which indicates increased appetite of the economy for deals even during slower times.
M&A transactions for the month were dominated by cross-border transactions as against a mix of cross-border and merger transactions in February 2018. The dominance of inbound transactions within cross-border transactions indicates continuing interest in India and Indian companies. Outbound transactions were primarily undertaken by the overseas entities of the Indian businesses, which also highlights their strategy of wanting to be global players. The deal list for the month also includes a significant merger transaction between Airtel Kenya and Telkom Kenya. However, it is not reflected in the deal values as no value has been reported for the transaction.
PE/VC deals witnessed lower activity across sectors in February 2019 as compared to February 2018. PE investments for the month were fairly diversified across banking and financial services, real estate, start-ups, e-commerce and infrastructure companies; however, in volume terms, start-ups continued to lead the pack. Lower activity across sectors is a signpost for cautious approach by the PE/VC fraternity.
Sector focus
Pharma, healthcare and biotech, and IT and ITES sectors may likely lead the M&A league tables, whereas banking and financial services, real estate and energy and natural resources sectors are expected to be sectors of focus for PE/VC investments. Transactions in the e-commerce sector will be negatively impacted by the revised e-commerce policy announced by the government.
Outlook
The shortening of the run-up period to the national elections will only deepen the wait and watch approach in the deal environment in the short term. Much is expected post the results of the general elections.
