See M&A action in aviation, retail & media: Grant Thornton

In an interview to CNBC-TV18, Raja Lahiri, partner, Grant Thornton India says that despite the slow start to the Deal Street in January, he is hopeful of M&A being clocked in the days to come.

Another report has claimed a significant slump in January as the targeted merger and acquisition (M&A) volume reached USD 615 million, the lowest January volume since 2003. Read here

"It has been a slow start. We saw billion dollars clocked in January. So, it is indeed a slow start, but we are hoping that there will be lot more action as we proceed," he says.

Lahiri adds that M&A is very sector specific but is expecting a few sectors to see some deals taking place. "I believe that there are certain sectors that will see some good action. Aviation is one, retail is another one and lastly, media should see some action," he adds.

Below is the edited transcript of Lahiri's interview to CNBC-TV18. Q: It seems like it has been a slow start to the year as far as deal street action goes?
A: It has been a slow start. We saw billion dollars clocked in January. We saw 800 and more in merger and acquisitions (M&A) and 200 and more in private equity transactions. It is interesting to note that last year 2012, it was at USD 2 billion and the year before, in 2011, it was USD 3 billion. So, it is indeed a slow start, but we are hoping that there will be lot more action as we proceed. Q: As we approach the fiscal end, how is Q4 looking to you? How is the round up M&A action for the quarter as a whole?
A: If you look at the deals that have been clocked this month, there was National Thermal Power Corporation (NTPC) actually doing an acquisition of USD 400 million and more. There was some interesting action in banking, financial services and insurance (BFSI). Ratnakar Bank got private equity funding of USD 50 million plus and Exide bought 50 percent equity stake of ING Life Insurance for USD 100 million. So, it all depends on sectors. However, I believe that there are certain sectors that will see some good action. Aviation is one, retail is another one and lastly, media should see some action.
The other trend that we are hoping that we will see some action is the inbound which has been quite muted for some time and we hope that, that really picks up in this quarter. Q: What is your verdict for fiscal 2013 as a whole as we said as we approach the year end?
A: This is going to be a key quarter. However, the policies of the government have been very important and it has indeed helped in the deal sentiment. However, typically, the Budget could be a slow quarter as far as deal making activity is concerned. Some of the larger transactions may just topple over after the Budget, because people would like to wait and watch in terms of stability of the regulations and the government policies. So, let us see how things pan out.