India becoming influential M&A market: Mergermarket

NEW DELHI: India is becoming an increasingly influential M&A market with its merger and acquisition activity reaching $64.5 billion last year, comprising 8.8 per cent of the overall Asia-Pacific deals and highest since 2007, says a report.

According to Mergermarket's India M&A trend report, the $64.5 billion total was through 388 deals.

"The country is becoming an increasingly influential M&A market, comprising 8.8 per cent of Asia-Pacific deals - the highest since 2007 (9.4 per cent) and significantly more than the 3.6 per cent market share logged in 2015," Mergermarket said.

The average deal size increased to $166.2 million, more than double 2015's average of $80.4 million.

Total inbound activity reached all-time high on Mergermarket record, with a significant increase from 2015. Total inbound M&A value amounted to $30.8 billion across 176 deals - a 62.3 per cent increase compared to 2015 when transactions worth $19 billion were announced.

Sectorwise, energy, mining & utilities replaced financial services as the most active sector with deals totalling $17.1 billion - almost three times that conducted a year earlier and accounting for 26.5 per cent of market share value.

This was largely fuelled by Essar Group selling a combined 98 per cent stake in Essar Oil to both Rosneft and Trafigura for a combined $12.7 billion.

Meanwhile, technology accounted for just 56 deals last year, down from 89 in 2015. This was the largest decline in deal count across all sectors.

According to Mergermarket intelligence, Sector multiples and valuations in previous years were considered overpriced, but have since reached a more respectable level.

Following a dip in activity in the technology sector last year, 2017 has the potential to improve but is unlikely to reach the heights seen in 2015 as investors wait for a further easing towards more realistic multiples and valuations.