India Inc’s March M&A deal tally jumps 4-fold to $28 billion

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India Inc’s M&A deal tally in March rose four-fold to $27.82 billion, led by the Vodafone-Idea merger, taking the overall figure to $31.54 billion in the first quarter of 2017, says a report.

Overall deal activity in the January-March quarter witnessed an unprecedented three-fold year-on-year rise in value terms, driven solely by the Vodafone-Idea mega merger, which accounted for 80 per cent of the total values.

“The Indian deal activity was dominated by big-ticket mergers and acquisitions (M&As) this quarter. The quarter witnessed one of the largest deals in the country with Vodafone and Idea’s merger, which is estimated at around $27 billion,” Grant Thornton India LLP Partner Prashant Mehra said.

The January-March quarter recorded $33.7 billion across 300 deals marking a sharp increase in value as compared to $10.9 billion in the same period last year while volumes declined by 27 per cent.Without the Vodafone-Idea mega merger, estimated to be a $27 billion transaction, the deal activity would have recorded 39 per cent decline in values, assurance, tax and advisory firm Grant Thornton said.

M&A market activity has so far been driven solely by the big-ticket deals, while on the other hand number of transactions continued to slip for the third straight quarter.

“Primary driver for M&A growth was consolidation in the domestic market with deal values growing by 10 times on the back of healthy capital markets and easing credit conditions. This enabled companies strike big ticket deals either to slash debt or consolidate market share,” Mehra said.

Meanwhile, the cross-border deal activity is yet to pick up pace in 2017 as compared to previous quarters due to looming uncertainties in the global economy.

Going forward M&A activity this year is expected to stay positive owing to the sustained interest in Indian economy.

Mehra believes consolidation and expansion is set to be the major theme that will drive the deal activity, especially in healthcare, telecom, e-commerce and infrastructure sectors.”In financial services sector, the possibility of new business models emerging post demonetisation, continued fund raising by NBFCs and a consolidation push by micro finance firms will play a big role,” he added.

Source:   http://economictimes.indiatimes.com/articleshow/58160464.cms

Fund raising via rights issue hits 5-yr high of Rs 9,239-cr

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Indian firms raised a staggering Rs 9,239 crore through rights issue in the past fiscal, making it the highest fund mobilisation in five years.

The huge fund-raising was primarily driven by Tata Motors’ rights issue.

Most of the funds were mopped-up for expansion, repayment of debt and working capital requirements.

In the rights issue mode, shares are issued to existing investors at a pre-determined price, normally at a discount, in proportion to their holdings.

Companies garnered Rs 9,239 crore in the past fiscal, which was 37 per cent higher than Rs 6,750 crore raised in the preceding financial year, according to an analysis.

This was the highest fund-raising since 2010-11 , when firms had raked in Rs 9,594 crore.

In terms of number, the past fiscal witnessed 12 companies using the rights route as compared to 17 firms in 2014-15.

The largest rights issue during the period was from Tata Motors which alone raked in Rs 7,498 crore.

It was followed by IL&FS Transportation (Rs 740 crore), Sun Pharma Advanced (Rs 250 crore) and Fortune Financial Services (Rs 204 crore).

Source: http://www.business-standard.com/article/pti-stories/fund-raising-via-rights-issue-hits-5-yr-high-of-rs-9-239-cr-116040800804_1.html