India Inc's M&A deal value declines 45% to $1.5 billion in October

New Delhi: Corporate India witnessed merger and acquisition deals worth $1.5 billion through 28 transactions in October, registering a 45 per cent decline over the same month last year, a report said on Thursday.

According to Grant Thornton's latest M&A Dealtracker, there were 28 M&A deals worth $1.5 billion in October this year, while in the same period last year 47 such deals were announced worth $2.8 billion.

While the overall M&A deal value and volume in October declined as compared to the year-ago period, on a month-on-month basis, there was an increase, showing signs of improved sentiments.

"This was driven by the corporate tax cut, which has improved both investor sentiment and confidence. This also resulted in the average deal size more than doubling from $24 million in September 2019 to $55 million in October 2019," the report said. The energy sector dominated October's M&A in terms of values with 64 per cent contribution to total M&A deals, driven by the largest bet on India's clean energy with Total SA's 37 per cent stake acquisition in Adani Gas for $0.9 billion. Other sectors that attracted major deals during October include pharma sector, pushed by Metropolis Healthcare's acquisition of four pathology labs to fortify its foothold in Gujarat, followed by deals in the automotive, banking and energy sectors.

"Deal volumes was fairly spread across pharma, automotive, banking and financial services, energy and natural resources, IT and ITeS, and media and entertainment sectors," Pankaj Chopda, Director, Grant Thornton India LLP, said.

He further noted that "manufacturing, energy and natural resources, pharma, healthcare and biotech, IT and ITeS, and banking and financial services sectors are expected to contribute to M&A transactions. However, the absence of large ticket M&A transactions will weaken the overall deal activity".

The January-October deal activity continued to witnessed weak performance in terms of both deal values and volumes compared to the year-ago period. In the first 10 months of this year, there were 350 transactions worth $25,162 million, while in the year ago period, there were 414 such deals worth $80,640 million.