Tuesday, April 3, 2007

Q1 2007: M&As – $42 bn; VC / PE – $2.4 bn

The first quarter of Jan-Mar for the calendar year 2007 has seen mergers and acquisitions (M&As) touch a figure of a whopping $42 bn. This has resulted in the M&A / GDP ratio standing at around 18%, against the global average of 8.8%. Out of the total deals announced by India Inc during the quarter, $38.9 bn represent strategic M&As including the big ticket Tata-Corus, Hindalco-Novelis and Vodafone-Hutch deals. In March there were 54 M&A deals announced worth $2.14 bn. The big ones last month were Tata Power’s $1.1 bn deal for a strategic stake in coal assets in Indonesia and Havell’s $300 mn deal to acquire German lighting company SLI Sylvania.

With the spurt in M&A transactions in the Jan-Mar quarter, venture capital (VC) / private equity (PE) investments in India also seem to be riding on a crest. The first quarter of 2007 has seen VC / PE investments almost double to about $2.4 bn across 78 deals compared with $1.4 bn across 69 deals in the same period last year. The figure of $2.4 bn doesn’t include real estate investments made in the first three months of the year. IT, manufacturing, financial services, engineering and construction, transport and logistics are the happening segments, going by investments in these sectors in this quarter. However, there has been a flat growth in VC investments, which accounted for only about $100 mn in Q1 across 15 deals. The figure includes 11 deals in the sub-$10 mn category.

Some of the big deals announced in the first quarter include a combined deal of about $500 mn for stake in National Stock Exchange by New York Stock Exchange, Goldman Sachs, Softbank and General Atlantic; Nimbus Communications received funding of about $125 mn from British PE firm 3i, Cisco Systems and Oman International Fund in January; Khazanah Nasional Berhad, the investment arm of the Malaysian government, hiking its stake in IDFC to 9.95% by paying around Rs. 820 crores in March; Kotak Mahindra Bank’s Private Equity Group investment of Rs. 100 crores in DRS Logistics, a logistics and transportation service provider based out of Hyderabad; ADM, an HK-based fund, invested $82 mn for a 10% stake in SKNL; Ramky Infrastructure, a Hyderabad-based construction company, raised Rs. 125 crores from IL&FS Investment Managers and UAE based Sabre-Abraaj PE Fund.

Read The Economic Times articles – 1 & 2.

No comments: