Deal activity by Corporate India in value terms zoomed nearly 38 per cent to USD 3.6 billion in August, driven by eight big-ticket deals worth over USD 100 million, says a report.
Overall deal value — mergers and acquisitions (M&A) as well as private equity (PE) transactions — stood at USD 2.6 billion, during August 2015, according to accountancy and advisory firm Grant Thornton’s monthly dealtracker report.
“August 2016 witnessed transactions worth USD 3.6 billion (134 deals) with a strong 38 per cent y-o-y boost in value while volumes declined by 8 per cent year-on-year,” the report said.
Individually, M&A activity contributed USD 2.5 billion to the overall deal value in August.
On the M&A front, cross-border deal value increased by 45 per cent as compared to August 2015, and there has been an almost three-fold increase in value in domestic M&A.
PE activity, however, declined from USD 1.7 billion in August 2015 to USD 1.1 billion in August 2016 once again this month, both in terms of value and volume.
“The month witnessed a big-ticket merger activity with the HDFC Standard and Max Life insurance deal, valued at above USD 777 million. This deal drove the deal activity in this segment,” the report said.
Further, the report found that the overall deal activity in the first five months of the current fiscal “has remained steady, with strong M&A growth driving a 6 per cent year-on-year rise in values, while PE investments sustained the deal volumes”.
“This year has witnessed large domestic transactions with the segment’s values growing two-fold year-on-year,” it said.
“Six deals in the billion dollar club and seven deals over USD 500 million contributed to nearly 60 per cent of M&A deal values,” it added.
However, the report noted that PE investments in 2016-17 till August-end have displayed a sharp 30 per cent drop in investment values compared to same period year-ago.
As per the report, August was dominated by persistent consolidation in the startup sector with 31 per cent of the M&A volumes with on-demand and online retail segments garnering much investor attention.
Telecom, agriculture and forestry, pharmaceuticals and manufacturing sectors witnessed big ticket deals values over USD 100 million each, it added.