We has seen an uptick in M&A deal volumes in the first half, but valuations are less compared to corresponding periods of 2011 and 2010. Outbound deals have reduced both in terms of volume and value; inbound deals have increased in volumes. The Vedanta Group restructuring has also added to a jump in mergers and rejigs in comparison to previous years.

Below is the edited transcript of Raja Lahiri, Partner - Transaction Advisory Svcs, Grant Thornton India, interview to CNCB-TV18.

Q: Has the going being tough in the first half compared to corresponding last two years?

A: The going has been pretty tough this year and we are seeing a slowdown in M&A. In terms of deal value, this year has been lowest compared to last three years. An interesting point to note this year is the significant amount of happening of restructuring and internal mergers. Of the USD 25 billion deals, close to USD 15 billion came from internal merger and restructuring.

Sesa Goa, Sesa Sterlite USD 12 billion deal and Mahindra Satyam with Tech Mahindra are two large deals. Across the border we are not seeing large deals happening, inbound and outbound both are down. Currently, the sentiment is week. Factors like the economic environment, growth rates, GAAR issue are impacting deal momentum.

Q: Which sector performed in the first half of this fiscal?

A: In mining, Sesa-Sterlite deal dominatec with the USD 12 billion transaction. In IT, ITES sector we saw Japan's NTT buying Netmagic and Tech Mahindra-Satyam merger.

In the pharmaceutical space, Piramal purchase of asset in the US. In banking financial services sector, HSBC buying RBS, deal which was approved by the RBI. These are the deals as far as M&As are concerned.

In private equity space some themes are coming up. Healthcare remains a very dominant sector; some good deals like Vasan Healthcare with DM Healthcare and with Care Hospitals. So, healthcare theme continues to be robust.

In the IT, ITeS sector in private equity, Internet is the favorite of the season. We saw Warburg buying Quikr. flipkart getting USD 150 million from Accel.

In the financial services sector, there is a trend in private equity taking interest in NBFC space, Warburg bagging two good deals, Future Capital and EU Financials.

Q: As you said restructuring and rejig sort of was seen in the first half of the year. What is the outlook going ahead?

A: We are definitely seeing a slowdown and as far as M&A is concerned liquidity is tough, the environment is not easy, but I believe this is a great time for private equity funds to look at investments in certain sectors because valuations could come at a sensible level, and for larger corporates in the IT, ITeS sector its a good time for a value pick in the US and the European markets. Strategically, this is a good time to do acquisitions. However it's the sentiment which is applying breaks as of now.