Number of private equity and merger & acquisition deals down: Grant Thornton

Mumbai: The investment environment continues to be subdued across industries in India. The recent Grant Thornton analysis of private equity and merger & acquisition suggests that in the first three months of 2013 the total value and number of deals in the first three months of 2013 have come down in comparison with the first three months of last year. In the first three months of 2013, the total value of mergers & acquisition and private equity deals was US$5.8 billion for 219 deals, while in 2011, the total value of private equity deals and mergers and acquisitions was US$20.5 billion for 299 deals.

Among various sectors that recorded highest private equity deals and mergers and acquisitions was pharmaceuticals, healthcare and biotechnology. These three sectors being defensive in nature provide a strong shield against the difficult business situation across various sectors. These three sectors had deals valuing at 22% of the total value of private equity deals and mergers and acquisitions. Also power and energy sector had 15% of the total value of private equity deals and mergers and acquisitions, while real estate and banking and financial services had deals amounting to 13% each respectively of the total value of deals that transpired in the first three months of2013.

The report points out that the total value of outbound deals (Indian companies acquiring businesses outside India) in Q1 2013 was US$0.19 billion (21 deals) as compared to US$0.69 billion (26 deals) during Q1 2011, registering a decline of over 72% in value, while the total value of inbound deals (foreign companies or their subsidiaries acquiring Indian businesses) in Q1 2013 was US $ 2.90 billion (29 deals) as compared to US $ 1.26 billion (36 deals) in Q1 2011, showing an increase of over 130% in value. It also points out that the total value of domestic deals in Q1 2013 was US $ 1.41 billion (66 deals) as compared to US $ 2.01 billion (71 deals) during the corresponding quarters in 2011. The report finds that private equity deal values amounted to US $ 1.29 billion (90 deals) in Q1 2013 as compared to US $ 2.13 billion (121 deals) during the corresponding quarters in 2011.