M&A Deals Worth Rs 27,000 Crore In One Week
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With markets hitting new highs almost everyday and business sentiment improving, India Inc got on to the mergers and acquisitions (M&A) bandwagon, closing as many as six deals worth Rs 27,153 crore in just seven days.
The deal makers are expecting more such "frenzied" weeks and months ahead with domestic deals overshadowing both outbound and inbound deals due to the rising market sentiment.
"I don't recall so much activities happening in just one week. Five deals in a week is unprecedented in our market. The market is in a frenzy and the deal making gathers more traction going forward if the rising bullishness in the economy is any indication," said Mahesh Singhi, founder and managing director of boutique investment bank Singhi Advisors.
"I see more deals between domestic companies as there are many low hanging fruits up for grabs. I also see this bullishness racing past next year as many more are in the making," he said.
For the past three years, deals had almost been dried up in the country as sentiment was down, but since the beginning of 2014, i-bankers were working overtime and the results have started bearing fruits now, he added.
ICICI Securities, also sanguine about the deal market, says going forward the climate is conducive for more deals as there are many low-hanging fruits available in the market.
Anup Bagchi, MD & CEO at ICICI Securities Ltd, said, "With a strong economic outlook and markets showing positive signs, we have been seeing more discussions led by private equity firms for exits through going public or M&A. We are seeing corporates looking to strengthen growth through acquisitions."
"Deal sentiment is quite positive. Global investors are very bullish about the country since the elections and I am very positive about more deals as there is scope for more consolidation in many sectors," ICICI Securities M&A Head Hemant Vora said.
Biggest Banking Deal
Kotak Mahindra Bank clinched the biggest M&A deal in the nation's banking history and also the biggest across the sectors so far this year, by snapping up ING Vysya last Thursday in an all-stock deal, valuing the troubled Dutch lender's Indian franchise at Rs 15,033 crore.
The second biggest deal was sealed by JSW Power when it bought 2 hydel units of the debt-laden JP Associates for Rs 9,700 crore in a cash and debt deal on last Sunday.
As per the Mergermarket data, the country saw $21.7 billion worth of M&A transactions in the first nine months of the year, up 22.4 per cent from the year-ago period. With these four deals, M&A transactions in 2014 have surpassed the $22.3 billion in the entire 2013.
The deal street got spruced up last week when the debt-laden Jaypee group's Jaiprakash Power Ventures -- after failing to make RInfra walk the talk last month -- managed to get JSW Energy to buy out its two hydel plants in Himachal Pradesh for Rs 9,700 crore.