Private equity investments, M&As dip in February

MUMBAI: Falling markets and lack of visibility of growth in revenues have resulted in lower investments by strategic investors in February this year on a year on year basis.

According to a study by Grant Thornton, it is observed that the number of private equity deals in February this year has fallen to 70 deals from 95 deals in the corresponding month last year. The study also found out that the total value of mergers and acquisition fell drastically by 82% to US$2.7 billion in February this year in comparison with the same month under review. The total value of inbound deals—foreign companies or their subsidiaries acquiring Indian corporations fell to US $1.9 billion from US $7.4 billion in the same month last year. Also the total value of outbound deals—Indian companies acquiring businesses in overseas markets was US $0.07 billion with a mere four deals in comparison with five deals valuing at US $0.44 billion in the same month last year.

This shows that there is a subdued interest among these strategic investors concerning investments in Indian as well as overseas markets. In India particularly, these investors are gradually increasing their exposure to key essentials of the economy. It has been observed that the top five mergers and acquisitions have transpired in sectors which are needed for the growth of the economy and to a certain extent are defensives in nature. These are pharmaceuticals, healthcare, FMCG, Food & Beverages, IT & ITES, real estate, and banking and financial services.