New Delhi: The total value of mergers and acquisitions by Indian companies in April declined 73% year-on-year to $1.97 billion because of poor appetite for big ticket deals.
In April last year, there were 64 M&A transactions worth $7.44 billion, says a report by Grant Thornton India.
The average deal size also declined and there were no big ticket deals, it said. The average deal size was $32.94 million.
Explaining the decline in deal value, Harish H V Partner, India Leadership Team, Grant Thornton said, “The uniform trend in all segments is a drop in average deal values the reasons for which could be lower appetite for larger deals and dip in valuations.”
Inbound deals, wherein foreign companies or their subsidiaries acquired Indian businesses, were the flavour of the month.
The total value of inbound deals stood at $1.1 billion through 21 transactions, whereas there were 7 outbound deals (Indian companies acquiring businesses outside India) aggregating just $0.4 billion.
Meanwhile, the total value of domestic deals in April was $0.5 billion from 32 deals, compared with $0.2 billion through 25 transactions in the same month in 2011.
Japan’s Mitsui Sumitomo Insurance Company’s acquisition of 26% stake in Max New York Life Insurance Company for $530 million, marking the exit of USA’s New York Life Insurance Co from the joint venture, was the deal of the month, according to Grant Thornton.
India Hospitality Corp’s acquisition of Adelie Food Holdings for $350 million was the second biggest deal, followed by Roquette Freres’ 60% stake acquisition in Riddhi Siddhi Gluco Biols for $190 million.
Some of the other major deals include, Aditya Birla Nuvo’s 44% stake acquisition in the Kishore Biyani promoted Future Group’s Pantaloon Format business for $160 million and Dutch commodities trader Trafigura is investing $130 million to acquire 24% stake in Hyderabad -based Nagarjuna Oil Corporation Ltd.
“The top five M&A deals accounted for 69% of the total M&A deals values,” the report said.
