PROJECT

INVESTMENT BANKING             2018-04-04

Indian M&A Industry: Growth Outlook 2018

The year 2017 witnessed a healthy growth in deal value i.e. USD 60+ Bn as compared to USD 57+ Bn in 2016 however, the number of deals fell to ~1,140 in 2017 in contrast to ~1,480 in 2016.

Indian M&A and PE sector has been quite active lately and is likely to be at an upward swing for 2018. The year 2017 witnessed a healthy growth in deal value i.e. USD 60+ Bn as compared to USD 57+ Bn in 2016 however, the number of deals fell to ~1,140 in 2017 in contrast to ~1,480 in 2016.

 The growth catalysts have been debt reduction through sectoral consolidation, exit motivation for private equity funds, complexity of succession planning and inorganic growth motives of cash rich businesses amongst others.

 Sectors which witnessed the most traction in terms of deal value and volume in 2017 were: Telecommunications, Oil & Gas, Infrastructure, Financial Services, Technology and Retail Consumer Products

The key takeaways for 2018 are:

1)   India is ripe for PE funding at the moment however, as the startups will mature and PE will look for exits, number of M&A deals will rise.

2)   Increased Govt. focus on cleantech, financial inclusion & affordable housing will make investments in Banking and Financial, Real Estate and Energy & Natural Resources sector attractive.

3)   Retail Consumer Products sector will continue the momentum.

4)   Blockbuster deals right across the corner such as UltraTech acquisition of Binani Cement, Sale of Air India, Tata Steel – Thyssenkrupp merger, Manipal Healthcare – Fortis Hospitals merger etc. to drive the deal value in 2018.

5)   Domestic Deals to lead the tally in comparison to Inbound and Outbound Deals.