Merger and acquisitions activity valued at $8.4 bn in July

Mumbai: Indian companies announced merger and acquisition (M&A) transactions worth $8.4 billion (around Rs.51,090 crore) in July through 110 deals, an increase of 36% in transaction value and a 23% increase in volume over July last year, according to Grant Thornton India LLP’s monthly Dealtracker report.

“We have witnessed an increase in inbound transactions but we haven’t seen significant uptake in deals in the outbound space,” the report said. “We expect 2014 to be a bumper year as we see some activity in infrastructure, automotive and auto ancillary space as new capacities are added in the two- and four-wheeler and commercial vehicle segment.”

Total deals concluded since the beginning of the year stands at $30.99 billion against $23.05 billion for the same period last year, the report said.

The country saw cross-border transactions worth $4 billion in July, a 517% jump against $671 million in the same month last year. From January to July, deals worth $10.5 billion were recorded in the cross-border transaction segment against $9 billion for the same period last year, the highest in the last two years.

Cross-border transactions include inbound and outbound. Inbound transaction means acquisition of an Indian company by a foreign firm and an outbound acquisition is one where an Indian company acquires a foreign entity.

“With $30 billion deal value during the first seven months of this year, we are already seeing renewed and robust interest from international firms looking at Indian assets,” said Raja Lahiri, partner at Grant Thornton India, a consultancy.

Apart from this, deals in the domestic market have moved up significantly as Indian companies locally acquired assets worth $10 billion, which is an increase of 208.5% compared with the same period last year.

One of the biggest deals struck last month was Reliance Power Ltd’s acquisition of the Karcham Wangtoo 1,391 megawatts (MW) hydropower plant in Himachal Pradesh and the 400MW hydroelectric plant in Vishnuprayag in Uttarakhand from Jaiprakash Power Ventures Ltd for $2 billion.

Private equity transaction volume has also seen a significant uptrend in the year to date in 2014, compared with the previous year, the report said. Deals worth $1.85 billion were recorded in the last month, compared with $804 million in the same period last month.

According to the Dealtracker report, the largest private equity deal was struck by Morgan Stanley Investment Management and Government of Singapore Investment Corp. by investing $1 billion in Flipkart Online Services Pvt. Ltd.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.