Total number of merger and acquisition (M&A) deals of Indian companies in 2014 rose to 1,177 – valuing at about USD 50 billion – the highest ever in a decade and the momentum is set to pick even higher this year, according to a report.
M&A deals contributed close to USD 38 billion from 573 deals and Private Equity (PE) deals contributed USD 12 billion from 604 deals, said a new report by advisory firm Grant Thornton.
E-commerce within the Information & Technology (IT) space was the major contributor for PE investments with about USD 4 billion being raised from over 100 deals.
“Last year’s deal value at USD 50 billion has been a fantastic year for deal making with a very strong foreign investor interest in India,” said Bounders Singh Rangar,
Chairman of London-based advisory firm IndusView.
Domestic M&A deals are largely riding on the consolidation wave with Sun Pharma acquiring Ranbaxy, Kotak merging with ING Vysya, Flipkart looping in Myntra and a few large power sector mergers and acquisitions.
The report further said there were eight deals in the billion-dollar club, and 54 deals valued over 100 million each, highest ever in the last decade.
Around 20 Indian firms had signed M&A deals in the US in 2013 while one-fourth of the total 268 outbound acquisitions were made in the US between October 2013 and December 2014.
It is expected that 2015 deal-making will reach even higher levels, Rangar said as he congratulated Prime Minister Narendra Modi for the swift business friendly changes his government has introduced in the past six months.
“Modi and his government have brought in the past six months the belief that change can happen. What investors look for is consistency, predictability and transparency,” Rangar said, adding the government is aiming to improve India’s overall ranking in ease of doing business index to 50th position in the next two years from the current 142nd.
To further improve the ease of doing business in India, the Commerce Ministry is taking steps that include allowing exporters and importers to make the payment of fee through debit or credit cards, Rangar said.
Currently, traders can pay fees only manually or through net banking.