In an interview to CNBC-TV18, Harish HV, Partner, Grant Thornton reviews major merger and acquisition (M&A) deals in 2014 and shares his expectation on the same.
Below is verbatim transcript of the interview:
Q: What was the deal activity in 2014 compared to 2013-2012? There were multiple areas of issues including the regulatory framework, how was the overall outlook?
A: Year 2014 in comparison with the last few years was blockbuster. We had almost USD 50 billion of deals. When we first launched this publication deal tracker in 2005 we had deals worth only USD 16 billion.
In about 10 years we have grown from a market of USD 16 billion worth of deals to USD 50 billion which is a huge jump. It shows that mergers & acquisition (M&A) is now a part and parcel of corporate strategy in India.
Second big thing that we are seeing is huge growth in private equity activity which has grown from something less than USD 1 billion in 2005 to almost USD 12 billion this year which is again a huge jump.
Over the last 10 years we can count nearly USD 90 billion of private equity coming into this country and that is the second big thing.
The third big thing is again a bounce back of cross-border deals both inbound and outbound which accounts for almost half the total value of deals. Again if we look at it from a sector perspective, we are talking of the same sectors tech, pharma and to some extent the natural resources and financial services.
Q: You mentioned cross-border activity and as per your report the outbound deals in 2014 stood at 117 deals worth USD 9 billion. This is down by 35 percent and so, the search and activity has come in inbound or outbound deal or domestic deals?
A: There is a lot more inbound then outbound, if you look at the Indian history of inbound - outbound deals in 2005 - 2006 we had more inbound than outbound then it flipped. We saw a lot of outbound activity but again it flipped back to more inbound.
We see outbound again coming up with certain optimism. It had dipped with the general mood in India where optimism was a little low.
Also, there was a bit of over enthusiasm in doing outbound in the 2007-2008 era there were some mistakes people lost money and therefore there was a little bit of flow down. I can see again interest in outbound with particularly in the tech sector and the pharma sector and again including a manufacturing sector.
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