Immediate upswing in deal momentum unlikely: Grant Thornton

According to data complier Grant Thornton, the deal activity for the month of October 2013 was far subdued compared to that of October 2012.

Going forward too, Raja Lahiri Partner - Transaction Advisory Services, Grant Thornton does not see an upswing in the deal momentum. However, larger funds will continue to put bets on Indian growth story, he adds.

For the month of October'13, 74 deals happened both on the mergers and acquisitions (M&A) side and on the private equity side, he adds.

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Below is the verbatim transcript of his interview on CNBC-TV18

Q: How do the numbers stack up for October?

A: October is a very similar month as September, overall USD 2.3 billion of deals in private equity out of which around USD 1.5 billion of M&A and USD 800 million of private equity. So, across sectors I would say around 74 deals happened in this month compared to October 2012 it has clearly slowed down as I have said in the previous episodes as well.

Q: Sectorally, what really stood out as far as deals go and what would be that one key deal that was in the limelight as far as October went?

A: From a deal perspective in October ONGC Videsh (OVL) bought an asset investment in the Brazilian oil field, which was basically a USD 100.5 billion of investment. It was the largest deal as far as M&A is concerned.

There was another interesting deal of quality healthcare on M&A side; Fortis selling its Hong Kong asset to a UK based medical player, a USD 300 million plus transaction.

From the private equity side we saw very interesting deal in the real estate space where Red Fort Capital invested USD 160 million in a developer, and Flipkart raising another USD 150 million from clutch of investors. So that is as far as the top deals go in this month.

Q: What is the outlook going forward as far as deal street goes? Do we see a pick up in the second half of the year, what really is the verdict?

A: I feel it is muted, a little moderated at this moment. It is again in conjunction with what we have seen in the economy.

The good news is we are clearly seeing a lot of diligences being done on transactions which means deals are cooked and diligences are being done. It is ofcourse taking a lot of time to complete the deals.

I don’t see immediate upswing in the deal momentum but see moderation. Across sectors like private equity we have seen a lot of interesting deals happen and the larger funds will continue to put bets on the Indian growth story in my view.