Merger and acquisition deals in May dipped 29 per cent to Rs 21,450 crore against Rs 30,030 crore. The number of deals executed was also down at 68 against 100 logged in May 2011.

Private equity investments plunged 97 per cent to Rs 192 crore in May from Rs 6,270 crore registered in same period last year, according to “Deal Tracker” released by Grant Thornton, a global auditing and business consultancy firm.

Overseas buys

The sharp fall in M&A activity was attributed to global economic slowdown, especially in Europe and concerns over Government policies in India. Besides, depreciation of rupee against dollar has also played a key role in hampering M&A deals.

There were only eight deals (worth Rs 522 crore) in May involving Indian companies acquiring assets overseas against 20 (valued Rs 12,430 crore) in the same period last year. Foreign companies acquired assets in India worth Rs 11,550 crore in nine deals against Rs 7,260 crore in eight deals last year.

Banking and Financial Services topped the list of deals accounting for 54 per cent of the total value of M&A deals. It was followed by other sectors such as pharma, IT, telecom and travel and tourism.

Mr Raja Lahiri, Partner, Transaction Advisory Services, Grant Thornton India LLP, said there is potential for domestic mergers with some of the promoter groups looking to reduce debt burden.

For instance, the Kishore Biyani-owned Future Group recently sold off Pantaloon Retail to Aditya Birla Group to raise Rs 1,600 crore and stake in its non-banking finance arm Future Capital to Warburg Pincus for Rs 420 crore.

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