The first quarter of 2014 witnessed a dip in the overall deal value but the deal volume has had an upsurge against the corresponding period in 2013 owing to steady escalation in Private Equity investments with 51 per cent deal volume coming from PE or venture capital investments alone in this period, according to Grant Thornton Dealtracker report.
The report highlighted that in Q1 2014 the overall deal activity stood at $6 billion (261 deals) against $7 billion (222 deals) in 2013 and $20 billion (299 deals) in 2012.However, PE investment in Q1 of 2014 were higher at $2.1 billion (133 deals) against $1.6 billion (90 deals) and $2.1 billion (121 deals) in the corresponding quarter in 2013 and 2012 respectively.
The top sector in M&A in terms of value was energy & natural resources which witnessed 20 per cent ($798 million) of overall deal activity and in terms of volume, IT & ITES which witnessed 21 per cent (25 deals) of overall deal activity.
The top sector in PE both in terms of value & volume was IT & ITES which witnessed 34 per cent ($717 million) of overall deal value and 41 per cent (54 deals) of overall deal volume.
Harish HV, Partner, Grant Thornton said: “This is an election year and that brings in its own share of uncertainty. External pressures and political situation have impacted deal values which clearly mean that growth in value will need better economic scenario and more particularly a better capital and debt market support which has been missing.”
Raja Lahiri, Partner, Grant Thornton said: “While we are seeing some emerging trend in the inbound deals including some in the energy sector, cross border deal activity still remains subdued. M&A trend in Indian telecom has emerged with Bharti Airtel acquiring Loop Mobile and the e-commerce sector continues to be an attractive play for PE or VC as well as international strategic players.”
“We see an increasing trend in buy-out transactions but exit challenges for PE funds still continue which remains the key strategic focus for PE Funds in 2014,” he added.