2023-07-05 13:05:29
Deal value of India-focussed Mergers & Acquisitions (M&A) slumped 75 per cent between January and June 2023 to hit a six-year low of $32.55 billion ($129.41 billion), according to latest data by Refinitiv.
This is even as the number of M&A deals saw an increase of 5 per cent to 1,439 deals (1,368 deals) for the period under review. The deal value performance in the first half this calendar year was weighed down by lack of mega deals, unlike last year when the $60-billion HDFC-HDFC Bank merger deal was announced.
In the first half of this calendar year, domestic M&A activity totalled $16.7 billion, down 83.2 per cent from the same period in 2022. Inbound M&As fell 46.3 per cent from a year ago and totalled $12.0 billion. Outbound M&A activity reached $3.7 billion, down 38.5 per cent year-on-year, with the US being the most targeted nation with a 30.8 percent market share.
Elaine Tan, Senior Analyst at Refinitiv, said deal-making involving India witnessed a record number of deals during the first half period of this year, with more than 1,400 transactions announced to date. “This is the busiest semiannual period by number of announced deals involving India since records began in 1980,” said Tan.
“While M&A activity may not have been driven by mega deals this year, a healthier level of mid-market transactions dominated the market. Given the global macroeconomic uncertainty, deal makers are exercising a degree of conservatism, translating into fewer large deals”.
No deals bigger than $1 billion involving India have been announced during the first quarter of 2023, but there have been at least four deals within the $1-billion range announced in the second quarter (April to June).
IDFC first-IDFC
The anticipated merger of IDFC First Bank with IDFC Ltd could prop up India’s M&A activity for the rest of the year, according to Tan.
In the equity space, IPOs issued by Indian companies saw the busiest first half period since 2018. The number of IPOs grew 25 per cent compared to a year ago, with 75 small-to-mid-sized listings raising $ 1.4 billion, a 73 per cent decline in proceeds.
The proposed shortened listing timeline could drive more activity in India’s IPO markets. Follow-on offerings increased 127 per cent from a year ago, raising $ 9.0 billion, driven by the share sale of four Adani Group companies, which totalled $1.9 billion, as well as record issuance of block trades, Tan added.
The latest Refinitiv data also showed that India investment banking activities generated $ 515.2 million during the first half of 2023, a 17 percent increase compared to the first half period last year and the highest semi-annual start year since 2021 ($ 524.1 million).
Completed M&A advisory fees fell 26 per cent year-on-year and totalled $ 141.4 million. ECM underwriting fees reached $90.9 million, almost unchanged from a year ago.
Axis Bank took the top position for overall investment banking fees in India with a total of $ 34.0 million, accounting for 6.6 per cent wallet share of India’s investment banking fee pool.
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Published on July 5, 2023
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