M&A activity dips 31 pc in Sep quarter to $13.5 bn

MUMBAI: India Inc. witnessed a significant dip in deal activity in the September quarter over the previous one, with 225 inbound and outbound transactions of over USD 13.5 billion being recorded.

By deal values, the size is 31 per cent lower over the April-June quarter even though the total number of deals struck has increased from the April-June 2010 quarter's 203, consultancy firm Ernst & Young said in a report.

The majority of the deals, 82 per cent, were in the sub-USD 50 million category due to which the total deal size has not increased even after the number of deals going up, the report said.

In what is representative of the interests of the world in India especially the domestic demand-driven economy aspect, a whopping 75 per cent of the transacted value, or USD 10.1 billion, in Q2 was inbound.

"India's relative resilience to the global economic downturn, coupled with the country's expected growth potential, makes it a very attractive target destination," the report said.

In the corresponding period last year when the world was coming out of the slowdown, India had witnessed 251 deals worth USD 4.9 billion getting completed.

On a sectoral basis, oil and gas leads the charge courtesy UK-based Vedanta Resources' acquisition of a controlling stake in Cairn Energy for USD 8.5 billion. Other high value transactions completed during the period include Japan-based JFE Steel picking up 14.99 per cent stake in JSW Steel for around USD one billion.