Corporate India’s merger and acquisition activity fell to an eight-month low in August with 33 deals aggregating to USD 0.6 billion, largely owing to the absence of big-ticket transactions, says a Grant Thornton report.
According to the latest Deal Tracker report, on a year-on-year basis, the deal values dropped 32 per cent, while there was also a fall of 31 per cent in terms of a number of transactions.
“Lack of conclusion on large ticket IBC (Insolvency and Bankruptcy Code related) transactions and other domestic or cross-border transactions impacted the deal report card in August 2018. Pharma, healthcare and biotech and media and entertainment sectors witnessed the maximum activity,” said Pankaj Chopda, Director, Grant Thornton India LLP.
In August, the startup sector accounted for 37 per cent of deal volumes as established corporates targeted them to digitise their operations, leverage operational efficiencies expand consumer base.
The media and entertainment sector saw four deals, of which two were in the entertainment (multiplex and gaming) space.
The top deal in August was Constellation Alpha Capital Corp’s acquisition of Medall Healthcare Pvt Ltd for USD 212 million — the largest investment in an Indian diagnostics company to date.
Notwithstanding the fall in August deal value, the January-August M&A deal tally recorded a robust 2.3 times rise on a year-on-year basis, primarily on account of revived domestic and cross-border deal activity. The year so far has registered 12 deals in the billion-dollar category and 33 deals valued at and over USD 100 million each compared to only two deals in the billion-dollar category and 23 deals valued at and over USD 100 million each in the corresponding period last year.
Going forward, deal activity is expected to be bullish in sectors like BFSI, consumer and retail, manufacturing, IT&ITES and pharma, healthcare and biotech as these segments are closely related to consumer consumption trends and lifestyle. Further, lack of relief to power companies facing insolvency suits under IBC law, will also drive M&A transactions in the sector, Chopda noted.