Financial sector tops India M&A deals

The sector has seen deals worth $11 billion in the nine months till 30 September, a 4.7 times jump from the year- ago period

Subrata Jana/Mint
Subrata Jana/Mint

Mergers and acquisitions (M&A) data collated by Thomson Reuters shows that about a quarter of the activity was in the financial sector this year.

The sector has seen deals worth $11 billion in the nine months till 30 September, a 4.7 times jump from the year- ago period.

The largest deal in the sector was the merger between HDFC Standard Life Insurance Co. Ltd and Max Life Insurance Co. Ltd. Materials, telecoms and energy, which were facing issues like price slump and heightened competition, also saw a fairly high number of deals.

Aditya Birla Nuvo Ltd-Grasim Industries Ltd amalgamation and merger of Aircel Ltd-Reliance Communications Ltd wireless business drove deals in materials and telecom sectors.

Gold loses its shine as imports continue slide

India’s gold imports have been declining since the end of 2013.

The trigger for the fall in gold imports was quantitative restrictions that the government imposed on imports of the yellow metal.

But while these were removed in November 2014, gold imports have continued to fall.

The improvement in macro stability and persistent positive real rates since January 2014 have led to a sustained decline in gold imports, Morgan Stanley points out in a note to clients.

Adjusted for exports of gems and jewellery, gold imports dropped to 0.4% of gross domestic product (GDP) as of August from 3.4% peak in December 2012.

Indians continue to be gold lovers but households that were stocking up on gold due to negative interest rates in early 2012 and 2013, have now pruned their holdings.

With the Reserve Bank of India expected to keep real rates in the 1.25-1.5% band, gold’s shine is expected to remain dim.

Spot electricity purchases hit record high

Overall electricity generation may not be growing much.

But spot electricity markets are seeing heightened activity.

The day-ahead or the spot electricity purchases hit record highs in September on Indian Energy Exchange (IEX).

Volumes rose 13% from a year ago to 3.63 billion units, the highest monthly trade since IEX’s inception in 2008.

Power distribution companies are driving volumes, with their share in total volumes rising to 40% from around 30% in earlier months.

States are increasingly getting active in spot electricity markets which are offering power at competitive rates.

Prices are down by about a third from a year ago due to ample supplies.

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