PE, M&A deals in India during November 2020 highest in last 5 years

A total of 149 private equity (PE) and merger and acquisitions (M&As) transactions in India happened in November 2020 — highest in terms of volume since November 2015. The month recorded three deals at over $1 billion each, while 11 deals are estimated at and above $100 million each.

According to Grant Thornton Bharat’s monthly dealtracker report, volumes were up 19% year-on-year (Y-o-Y), while deal value rose 52% on an annual basis to $6.9 billion in November 2020.

“Forty-two M&A transactions aggregating to $2.7 billion were reported in November 2020. The month was dominated by four big-ticket domestic transactions, primarily driven with the objective of consolidation, brand acquisition and achieving the leadership position in the respective sectors,” Grant Thornton Bharat said.

November reported 107 PE transactions aggregating to $4.2 billion, which is about 32% up sequentially, but a 41% increase Y-o-Y, it added.

Sectors like real estate, retail and consumer, manufacturing, pharmaceuticals, agriculture and forestry, and infrastructure sectors witnessed 9 high-value transactions aggregating to $5.3 billion, which constituted about 77% of the overall deal values reported in the month.

About 86 transactions were reported in the start-up segment, which included 9 M&As and 77 PE transactions aggregating to $764 million, which is about 58% of the total volumes.

“Real estate, retail and consumer, pharmaceuticals and IT & ITeS are expected to be evergreen sectors for M&A and PE transactions. Covid-19 has created several transaction opportunities by identifying sectors that remained insulated or thrived during the pandemic, indicating high potential and highlighted the significantly impacted ones, an indicator of the need for more resources. The hopes for a vaccine in the near term and the stimulus by the government in various forms and measures are expected to heat the transactions landscape and make all stakeholders seize the opportunities created,” said Grant Thornton.

Compared to October 2020, the overall deal values recorded a 6% fall due to an unmatched sum of big-ticket transactions, however, November witnessed a significant 41% hike in deal volumes driven by a 68% increase in the M&As and 32% in PE, indicating heightened deal activity.

M&As witnessed a whopping 81% increase in the deal values despite a 14% decline in the volumes compared with the same period last year.

“PE investment values recorded $4.2 billion in November 2020, driven by 2 deals valued over $1 billion each, translated to a 37% hike in investment values compared with the same period last year. However, compared with the best monthly values of $6.6 million, recorded in October 2020, November 2020 saw a 36% drop in investment values,” Grant Thornton said.

In contrast, November 2020 recorded the highest monthly investment volumes after the 109 deals recorded in July 2015. This month saw a big 41% jump in volumes compared to November 2019 and a 32% increase compared to October 2020, it added.

November 2020 valued recorded a single fundraise through qualified institutional placement (QIP) at $34 million, compared with three in November 2019 valued at $1.6 billion. Initial public offering (IPO) saw two issues valued at $985 million, compared with only one, at $58 million, last year.