See large domestic transactions in FY14: Grant Thornton

Raja Lahiri, partner - transaction advisory services at Grant Thornton talked to CNBC about the mergers and acquisitions (M&As) in India. He considers April 2013 as a good month because some large deals took place.

As far as the M&A and private equity is concerned the top two were the Etihad Jet Airways transaction for USD 379 million dollars and KKR private equity picking up a majority stake in Alliance Tire for USD 650 million. Going ahead Lahiri believes that FY13-14 will be very interesting because some large domestic transactions can happen. Q: How is the beginning of the fiscal looking, how do the numbers stack up on deal street then? A: April 2013 was a good month contrary to the moderation or the slowdown that we have been talking about. We saw USD 3 billion of deal value. Private equity was USD 1.2 billion and M&A was close to USD 1.8 billion. I would say clearly a good month. We saw some large deals. Large deals were clearly the aviation side the much awaited – the Etihad Jet Airways transaction for USD 379 million dollars. We also saw KKR private equity picking up a majority stake in Alliance Tire for USD 650 million. So, these were the two top deals as far as M&A and private equity were concerned. Q: Sectorwise what was the growth story in April? A: Sectorwise clearly aviation is with the opening up of the sector to upto 49 percent. The Jet deal has happened. This is a sector to watch out for, with Etihad taking the stake. The second sector that we have seen deals in April is financial services. We saw GIC actually picking up stake from the market in Kotak Mahindra Bank for close to USD 250 million. Also clutch of investors putting money in Ratnakar Bank. What we are seeing is some action coming back in IT and ITeS space with Tata Consultancy Services (TCS) doing an acquisition in Europe for close to USD 100 million. So, manufacturing, financial services, aviation, IT have been seen some good action in this month. Q: As you said not a bad start, a good start in fact to the fiscal. Quite a few large deals on Deal Street but what is the outlook then for fiscal 2014 itself? A: FY13-14 as I had said will be very interesting because the growth momentum has been slowing but that means some large domestic transactions can happen. Clearly some of the companies assets in the infra, aviation, retail and the broader media broadcasting space hopefully which sees some large good size in bound strategic interest coming in. We are waiting that to happen and I believe that we will see some action in that space. As far as private equity is concerned my personal belief is that we should see some good kick-off of secondary transaction. The KKR Alliance Tire is a great example of a secondary private equity transaction happening. Hopefully we will see some large ticket secondary PE deals happening, which demonstrates good PE exits for investors. So, that is the way I would put it as of now