With visible greenshoots of recovery in the Indian economy and the government’s reforms push, cases for inbound mergers and acquisitions (M&As) have increased recently. According to fair trade regulator, the Competition Commission of India (CCI), there are about 10 cases on an average coming up in a month compared to four or five a year ago.
Sectors such e-commerce, information technology, pharmaceuticals, life sciences and retail are likely to see a flurry of M&A activities.
The CCI is gearing up to clear a single case within the stipulated timeframe of one year, against the current practice of about 2 years.
“We need to compress it (the time taken) but we also can’t compromise on the matter.There should be reasonable timeframe,” CCI chairman Ashok Chawla told HT. There was a plan to take more specialists and experts on board to handle the situation, he added.
Analysts said with valuations becoming increasingly realistic, more number of deals were also getting closed now. “In the last one year, we have seen more cases of M&As getting closed, which were getting stalled mid-way earlier,” said Ashvin Parekh, managing partner, Ashvin Parekh Advisory Services.
Some of the recent big-ticket deals included Lafarge-Holcim merger, Sun Pharma’s acquisition of Ranbaxy, Kotak merging with ING Vysya and Flipkart taking over Myntra.
While Star TV also announced a deal to buy Telugu entertainment channel MAA for over Rs. 2,000 crore, Singapore’s Sembcorp is expected to pick up stake in the IDFC-backed Green Infra for over Rs. 1,000 crore.
Besides inbound M&As, there has been a spurt in outbound deals as well.
“There is no hiding the fact that M&A activities have gone up in the last few months. There have been an increase in financial sponsors’ activities, while there has been a significant spurt in domestic consolidation and global investments,” said Sanjeev Krishnan, leader, private equity, PwC India.
Advisory firm Grant Thornton said in a recent report that Indian companies inked 1,177 M&A deals in 2014 — valuing them at about $50 billion, the highest in a decade. Such activities are expected to continue in the current year as well, experts said.