The rising stock market is yet to make a better reflection in the country’s merger & acquisitions (M&As) and private equity (PE) deals. The total value in M&A and PE deals nosedived to more than half of the value a year back.
The total number of M&A transactions (excluding group restructuring deals) announced in May 2009 were 16 amounting to $118.83 million, as compared to 46 deals amounting to $1.34 billion during the year-ago period.
Though there is an improvement in numbers, the value of private equity deals in the last month decreased to $872.48 million in 18 deals as against 14 deals amounting to $1.45 billion in May 2008. Four restructuring deals took place last month while the value has not been disclosed.
There were eight domestic deals with an announced value of $68.09 million and eight cross-border deals with an announced value of $50.74 million. Seven of the cross border deals were outbound deals (Indian firms acquiring business outside) with a value of $50.74 million and the rest was an inbound deal (international firms acquiring Indian business).
The total number of M&A deals (excluding group mergers and restructuring deals) during the first five months of 2009 stood at 90 with an announced value of $2.14 billion as against 220 deals amounting to $10.78 billion during the corresponding period in 2008.
The total number of M&A deals announced during the calendar year 2008 stood at 454 with a total announced value of $30.95 billion, according to a study by Grant Thornton India.
CG Srividya, partner-valuation services, Grant Thornton India, said: “The reported levels of M&A deal values are significantly lower compared to the last several months.
However, the deal values have been announced for only 30% of the M&A transactions, which could be a key reason for the dip in reported values, while sustaining reasonable volumes. These include some large group mergers and consolidations where valuations have not been disclosed. In addition, we have also seen deals like Bharti-MTN restarting discussions. Such deals will be captured when there is a company announcement.”
The total number of PE deals during the first five months of 2009 stood at 74 with an announced value of $2.19 billion as against 163 deals amounting to $6.12 billion during the corresponding period of 2008. The total number of PE deals announced during the calendar year 2008 stood at 312 with a total announced value of $10.59 billion.
Srividya said, “Private equity investments have increased significantly and have shown higher level of investments compared to the previous seven to eight months. One of the reasons for this has been the improvement in sentiments driven by the stock markets.”