1/10/2021 India's deal market clocks $42 billion in first half of 2020
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India's deal market clocks $42
billion in rst half of 2020
21 September 2020 Consultancy.asia
More news on Merger & acquisitions (M&A) and private equity
deals kept up investment momentum in India over
India
the rst half of this year, as the market responded
Mergers & Acquisitions
to the needs and opportunities thrown up by the
Covid-19 crisis. This is according to a new report
from Nexdigm.
The Covid-19 crisis did put up some barriers, such
as a squeeze on capital, uncertainty and delays in
administrative functions. Both M&A and equity
investments suffered from this, although a
signi cant amount of deal activity did persist,
particularly in the second quarter this year when
things were starting to open up again.
“The uncertainty around business projections,
discord on the valuation of companies, and
diversion of cash ows to operational needs have
hampered deal success. Nevertheless, the
government and businesses are undertaking
relentless efforts to tackle the crises and ensure
long term potential of investments remain intact,”
explained Maulik Doshi, a Senior Executive
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1/10/2021 India's deal market clocks $42 billion in first half of 2020
Director in theTransaction Advisory
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What results from these efforts is a steady deal
landscape, amounting to $42 billion in deal value,
consolidating India’s position as Asia Paci c's
second largest deal market, as per a Bain &
Company report released a few months ago.
Nexdigm’s report suggests that the majority of
this deal value – 58% – stemmed from the M&A
landscape, driven for a large part by the sudden
need for collaboration. This is evident from the
fact that most M&A deals fell in the technology
and healthcare space – both of which have been
the backbone of the economy during the crisis.
Deals: mergers & acquisitions
Sheer numbers put signi cant pressure on
healthcare systems in India and across the world.
Private and public players began joining hands to
meet the volume, while governments began to
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1/10/2021 India's deal market clocks $42 billion in first half of 2020
clear the way for eHealthHire
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services – or
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News Consulting rms efforts are
Projects re ected in
Rankings the M&A
Jobs deal volume.
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The tech space had its own role to play. Given
that most of the economy was working from
home, digital tools became the sole drivers of
business activity, which drove up deal activity in
this segment. The researchers report that tech
deals took the lead when it came to deal value,
but healthcare saw signi cant volume with 100
deals in the rst half of this year alone.
Some of the most notable deals were GMR and
Groupe ADP ($1.5 billion), Krishnapatnam Port
and Adani Ports ($1.4 billion), Yes Bank and SBI
($1.4 billion), and Corporation Bank and Union
Bank ($1.0 billion).
According to Doshi, the healthcare and tech
sectors will presumably continue to drive deal
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1/10/2021 India's deal market clocks $42 billion in first half of 2020
activity for theforeseeable future. He also expects
Asia Hire a consultant Join the platform
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Projects of insolvency may consider
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consolidation through mergers to safeguard
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continuity. Conglomerates may also consider
demergers and asset transfers for business
stability.
Equity investments
The biggest news in the private equity space was
the Jio Platform deal with Facebook, which at $5.7
billion took up 60% of all deal value in India.
Outside of this, the investor landscape saw a
urry of small deals, with an average deal size of
just over $12 million. That is less than half of the
average deal size from the rst half of last year.
That being said, the smaller deals did add up to a
signi cant amount, comprising 40% of all deal
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1/10/2021 India's deal market clocks $42 billion in first half of 2020
value in India for the rstHire
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halfaof this year. Once
consultant Join the platform
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Projects with segments
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software as a service (SaaS), ntech and
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consumer tech all playing a large role.
Predictably, healthcare also drew signi cant
investments. Nexdigm reports that the lockdown
also threw a lot of alternative funding models into
focus. Structured deals, internet-focused
transactions and crow funding are some examples
of asset classi cations that have been thriving so
far this year.
On the whole, however, private equity deal
activity was down 8% since last year, amid
widespread economic uncertainty. Global
investors in particular are keeping their pockets
tight, as they wait to see where the new centres
emerge in global supply chains. According to
Doshi, not only does India have enough dry
powder to tide over this subdued global
investment landscape, but it is also positioning
itself to project itself as a low-risk, high-value
investment destination.
“With India determined to become a ‘self reliant’
country, the government has curbed corporate tax
rates and assured further changes in the ‘Make in
India’ initiative, to emerge as a favourable
investment destination compared to its South
Asian peers. This coupled with companies
exploring restructuring of businesses and supply
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1/10/2021 India's deal market clocks $42 billion in first half of 2020
chain due to change in geo-economic
Asia Hire a consultantdynamics, is
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News Consulting rms in the approaching
Projects Rankings years,”
Jobs heCareer
said. Consulting Industry
Partners In related news, a recent L.E.K. Consulting study
found that deal ow in Southeast Asia – India, the
Philippines, Thailand, Vietnam, Indonesia,
Malaysia and Singapore – has cooled signi cantly
in the rst six months of the year amid the Covid-
19-induced downturn.
Related links
Deal value in India takes a hit
amid global uncertainty
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