M&A deals had a strong showing in the second half of 2012 after an initial period of lethargy

The first six months were drenched in despondency followed by a resurgent second half.

Deal-making in India in the backdrop of strong global headwinds remained as volatile as the rupee. It didn’t help either that there was a regulatory overhang and policy paralysis in New Delhi.

Investors put their plans on the backburner for most part of the year. But with a new finance minister pushing ahead the reforms agenda with renewed vigour, the animal spirits among dealmakers made a mid-year comeback.


Flashback: ET recaps the best & worst of 2012

Tatas revived their M&A mojo by bidding $1.7 billion for Orient Express; ONGC Videsh wrote cheques of $6 billion for two Central Asian acreages; Hinduja Group made a billion-dollar acquisition of Houghton International while Hyderabad’s Rain Group bought out RÜTGERS for $915 million.

The traffic was truly crossborder and marquee inbound transactions (See Graphic) hit the headlines to ensure the subdued mood didn’t linger for long.


“Fundamentally, the India story remains strong. We lost a few months in the middle and there was a total lack of policy and regulatory clarity.

But we saw a reversal in sentiments led by government pronouncements of taxation and FDI in retail. CEO confidence is picking up and we will be ending the year on a medium- to highnote,” says Sourav Mallik, senior executive director, M&A at Kotak Investment Banking.

With the spurt in the fourth quarter of the year, investment bankers are hopeful that the momentum will sustain. “Based on market data, India M&A volumes were $56 billion in 2011.

This year, they are almost $60 billion. So, despite the somber mood, there is cause for optimism,” feels an upbeat Sameer Nath, head of M&A, Citi India, after closing the maximum number of deals this year.

One theme that stood out in 2012 was corporate restructuring. First Vedanta Resources collapsed all its listed and unlisted Indian assets under the Sesa Sterlite roof.

Then, Wipro demerged its non-IT businesses while JSW Steel folded Ispat into it and Tech Mahindra merged with Satyam. Across boardrooms the effort has been to streamline group structures through mergers or segregations to gain efficiencies.

“Investors are looking for simplified corporate structures and clear messaging. Companies have consolidated holdings, separated businesses that were dissimilar or non-core and merged companies with similar characteristics.

Companies have been working on these strategies for the last 2-3 years post the downturn and have executed well on their plans," explains Aisha De Sequeira, MD & head, investment banking, Morgan Stanley India.