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Seen uptick in M&A action; ecomm, IT best bets: Raja Lahiri

Raja Lahiri, partner, Grant Thornton, says the market has seen inbound deals as well as strong domestic deals in the past 9 months.

October 10, 2014 / 07:11 PM IST
 
 
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India has seen USD 39 billion investments in mergers and acquisitions (M&A) year-to-date (YTD) hinting at a significant upswing in deals, says Raja Lahiri, partner, Grant Thornton.


Speaking to CNBC-TV18, Lahiri says the market has seen inbound deals as well as strong domestic deals.


Also read: Merger on the cards for United Bank?

IT, pharma, oil and gas and ecommerce are likely to be the beneficiaries of this deal action positivity.

Below is the edited transcript of Raja Lahiri's interview.


Q: A major upswing you have seen in the January to September period but first if I could get a word from you on Q3 and what kind of an upswing you have seen with particular reference to the month of September?


A: This year it is around close to USD 36 billion of deals that have happened in the first 9 months. Out of that close to USD 13 billion have happened in Q3. Infact, Q3 is the best quarter as far as M&A and private equity is concerned in the last three years. So, this is clearly the best quarter. I think it completely reflects the current business sentiment and the deal sentiment. So, there is a clear upswing that we see as far as deals are concerned.

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Q: You are saying it is the best quarter that you have seen and that is also little surprising considering, I remember you were here last month telling us how August had been a very tepid month for deal activity?


A: If you see obviously one month may not be reflective of the action on ground. If you look at September we have some large announcements; Cognizant’s deal of USD 2.7 billion was a very large deal in the healthcare space and we have also seen KKR putting in money in GMR in the private equity space.


Fundamentally what we see is the overall positive sentiment coming from international countries especially Japan, China some of the government announcement that have made it just makes the landscape of deal making much more convenient and suitable. So clearly there seems to be far more action expected to go in the next month.


Q: You are saying it is the best quarter that you have seen and that is also little surprising considering, I remember you were here last month telling us how August had been a very tepid month for deal activity?


A: If you see obviously one month may not be reflective of the action on ground. If you look at September we have some large announcements; Cognizant’s deal of USD 2.7 billion was a very large deal in the healthcare space and we have also seen KKR putting in money in GMR in the private equity space.


Fundamentally what we see is the overall positive sentiment coming from international countries especially Japan, China some of the government announcement that have made it just makes the landscape of deal making much more convenient and suitable. So clearly there seems to be far more action expected to go in the next month.


Q: What is your outlook for the rest of 2014? We are heading into thanksgiving season, Christmas season, New Years season, are you expecting deals to very much continue, which are the hot sectors?

A: Two key trends have emerged, one is inbound is significantly up and the second is domestic deals. You have already seen Sun Pharma-Ranbaxy happening. In terms of sectors top sector in my view would remain pharma healthcare and second would be oil and gas and third would be IT. These are three sectors which will continue to remain positive and of course not to miss out on e-commerce, the billion dollar fund raising by Flipkart has obviously happened. So, clearly expect a fair amount of deal action going forward. 

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