India’s M&A deals soar to $126.09 bn

M&A deals in India soared to $126.09 billion across 1,185 deals in 2022. However, the growth rate — at 141% — was largely due to the HDFC Bank and Housing Development Finance Corporation merger which was worth $57 billion. The deal size, the biggest in India’s corporate history, was higher than the total value of all deals — $52.31 — in 2021.

This was followed by Adani Group’s acquisition of Switzerland-based Holcim Group’s entire stake in two Indian firms — Ambuja Cements and ACC — for about $10.5 billion, which was also the largest-ever acquisition by Adani, and largest M&A transaction in Indian infrastructure and materials space. The merger of two Larsen & Toubro subsidiaries – L&T Infotech and Mindtree – with a $3.3 billion deal value came in third.

Steel maker ArcelorMittal’s arm AM/NS India acquisition of two port assets and a power plant from the Essar Group for a net value of about $2.4 billion, and private lender Axis Bank’s acquisition of Citibank’s India consumer business for $1.6 billion in an all-cash deal among others topped the charts, according to Bloomberg data.

The M&A deals in 2022 rose 2.41 times from $52.31 billion in 2021, and was higher by 26.7% from a total of 935 deals recorded last year, the data showed. The top deal in 2021 included Piramal Group’s acquisition of Dewan Housing and Finance for $4.7 billion, while HDFC Bank’s merger, the single largest deal in 2022, was pegged at $57 billion.

“India has bucked the global downward trends in M&A and witnessed record deals in 2022. The domestic deals accounted for a sizeable share of the deals (72% by value and 52% by volume), and as far as sectors are concerned, technology and financial services constituted major deal value taking up over 30% of entire deal value. Going forward, we expect the momentum to continue due to attractive valuations and stronger balance sheets,” Sonia Dasgupta – MD & CEO, Investment Banking, JM Financial.

However, when considering acquisitions alone, the deal size fell to $2.8 billion in 2022, compared with $3.8 billion recorded in 2021, according data provided by Tracxn Technologies. There were 634 deals in 2022, compared with 541 during the year-ago period.

India had recorded over $82 billion pending and completed M&A deals in the second quarter of 2022, the highest amount on record, with the deals being were more than twice the previous record of $38.1 billion in the third quarter of 2019, according to data compiled by Bloomberg.

The deal momentum is expected to soar further in 2023, in line with the country’s economic growth, even as the next wave of the Covid-19 pandemic should be watched, a sector analyst said.

According to an earlier Morgan Stanley report, India is set to become world’s third-largest economy by 2027, surpassing Japan and Germany, due to the key investments the country has made in technology and energy.

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