The mergers and acquisitions activity in the new fiscal has been good, with USD 6.8 billion of M&A activity alone, says Raja Lahiri, Partner, Grant Thorton. According to him, the deal makers are bullish on the new government and there is clearly a surge in the momentum within dealers.
However, he believes, it will take a while to trigger off the momentum into significant deals but as the new government settles down the reforms are clearly articulated. He is bullish on infra, retail, consumer, pharma going ahead.
Below are excerpts of the interview:
Q: It seems like good news, there is a definite pickup in April compared to the action seen before, according to your report?
A: April 2014 has started with a bang. Nearly, USD 7.5 billion of M&A and private equity is probably the biggest number in the last three years and that's very good news. Out of that USD 6.8 billion is M&A. We have seen USD 2 billion transactions this month and private equity has been steady as well. So, the New Year has started with a very good momentum.
Q: Several big ticket deals and rise in price earning (PE) investments took place in April. Which major deal caught your attention? Even sectorally, which sectors were in focus?
A: The biggest deal of this month was Sun Pharmaceutical – Ranbaxy deal of USD 3 plus billion, clearly a landmark deal which makes Sun Pharma the fifth largest generic player globally.
The second one was the Vodafone deal which was the exit of Piramal Enterprises that made an investment of more than USD 1 billion with a fantastic exit return for Piramals. As far as private equity is concerned, we saw continued investments in e-commerce sector, smaller deals though. We saw deals across sectors like Ratnakar Bank raising money from CDC group and Mercator raising money from Aion Capital. So, private equity has been there pretty much across sectors.
Q: We are on the eve of counting day tomorrow and it is verdict day and we are likely to have a new government by this time tomorrow. What is the outlook given the change in circumstances for Deal Street. Do we expect a further pickup in M&A activity?
A: Deal makers are absolutely bullish. There is clearly a surge in momentum within the deal maker community. The wait and watch mode is hopefully going to changeover to a positive outlook going forward. The only word of caution would be that it is not going to just trigger off into a significant deal momentum immediately but as the new government settles down the reforms are clearly articulated, definitely we see action across some key sectors – infra, retail, consumer, pharma, top sectors which could see fair bit of action. So, absolutely positive outlook once the new government comes in.
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