The net value of mergers and acquisitions (M&A) involving Indian companies announced till date in 2007 has crossed the $50 billion (Rs1.99 trillion), for the first time in a year, according to deal-data tracker Grant Thornton India.
The value of deals announced in the first 15 days of September, has already taken the year’s total deal value well over $50 billion, said Dhanraj Bhagat, a partner who heads the firm’s investment banking practice in Mumbai. Grant Thorton India is a member firm of Grant Thornton International. The firm will publish the M&A deal report for September, only around mid-October.
Deal maker: Tata Group chairman Ratan Tata. Three deals involving Tata Steel, Hindalco Industries and Suzlon Energy, which accounted for about $20 billion, are what helped the deal value cross $50 billion
“The value of announced deals in September could be around $4 billion,” said Bhagat.
The value of 460 inbound and outbound M&A deals involving Indian companies announced until the end of August stood at $48.5 billion. On the other hand, net value of M&A deals involving Indian companies during 2006, was about $35.6 billion, according to annual data compiled by consulting major PricewaterhouseCoopers.
The forecast of net M&A deal value until the end of December this year, according to Bhagat, “will be in the range of $60 billion to $70 billion, excluding any large deals (over $1 billion) that could be announced in the next three months.”
However, three large deals, which together account for about $20 billion is what helped the deal value to cross $50 billion within the first nine months, added Bhagat. “Three large outbound deals that of Tata Steel, Hindalco Industries Ltd and Suzlon Energy Ltd has pumped up the net deal value,” he said.
Other major outbound cross-border deals include Wipro Technologies, the global IT services arm of listed Wipro Ltd, buying US-based Infocrossing Inc. and its subsidiaries for $600 million.
The total value of private equity deals has also gone up significantly from $7.9 billion in announced deals in 2006 to $11 billion until end August.
Even as equity and credit markets across the world, were shaken by the subprime crisis in the US, there was no significant slowdown in M&A activity. “There is very little chance for M&A to slow down in India,” said Bhagat. “As we see from interactions with clients and other companies, the mood is upbeat.”