Monthly Dealtracker - November 2019

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

While the question of ‘recession or no recession’ continued to be debated, November 2019 reported 124 transactions aggregating to USD 4.5 billion. The gap caused by the shortfall in M&A transactions was filled in by enthusiastic and opportune PE/VC players, resulting in overall growth of 85% in deal volumes and 37% growth in deal values as compared to November 2018.

M&A deal volumes in both domestic and cross-border categories exceeded the November 2018 levels. However, the absence of large ticket transactions dragged down the deal values in November 2019. Key transactions during the month were primarily focused on expanding market reach through geographical expansion, divestment of non-core business and resolution of IBC cases and technology acquisition through start-ups. NCLT approval for Patanjali Ayurved’s bid (USD 613 million) for Ruchi Soya was the largest transaction of the month.

PE/VC transactions for the month outweighed the M&A transactions for the month and also exceeded the deal volume and values as compared to the same period last year. Though consortium transactions and single PE transactions equaled in overall deal values, in volume terms 39 consortium transactions and 16 single transactions were reported. Majority of the single PE/VC-backed transactions are control transactions and done with the objective of paring debt in the group companies owning these businesses and facilitating target companies expand their product portfolio and market reach.

Sector focus: Retail and consumer and banking and financial services were the key sectors which attracted maximum M&A traction. PE/VC investments were focused on media and entertainment, e-commerce and pharma, healthcare and biotech sectors. Start-ups continued to be the favourites for M&A and PE/VC transactions in deal volume terms. IT and ITeS, manufacturing, and banking and financial services are expected to be sectors of action for M&A. Large PE/VC transactions will be focused on acquiring good-performing companies from business groups with heavy debt. Start-ups, e-commerce, banking and financial services, and pharma, healthcare and biotech sectors will see maximum PE/VC deal activity.

Outlook: The end of the year with long vacation period towards the end of the month does not promise too much action on the deals front. However, it does provide the impetus to come back fresh in the new year to revisit the opportunities left incomplete. Further, with several new opportunities untapped, we expect 2020 to be more exciting on the deals front.