M&As falter in 2012, to see revival in the new year
- Elections 2014 LIVE: Won't do anything with bad intentions, says Modi as BJP unveils poll manifesto
- BJP manifesto promises good governance, includes contentious issues like Ram Temple and Article 370
- Coal block scam: CVC Pradeep Kumar recuses himself from SC probe panel
- Chandrababu Naidu's TDP back in NDA, joins hands with BJP
- Lok Sabha elections: Lok Sabha elections: 41 pc polling in Tripura till noon
Mergers and acquisitions activity in 2012 failed to live up to the expectations raised in the previous year, which saw a surge in such deals, particularly inbound.
In 2012, deals fell both in value and volume terms, thanks to the ongoing euro zone crisis, slow recovery in the US, a weak rupee and a volatile stock market.
According to Grant Thornton, the period from January 1 to December 15, 2012 witnessed 582 M&A deals, totalling $41.5 billion, compared to 644 deals worth $44.6 billion in 2011. The 2012 figures include mergers and internal restructuring of $14.8 billion, bereft of which deal value fell as much as 39 per cent.
"At the start of the year, we were hopeful of several transactions happening," said Raja Lahiri, partner, transaction advisory, Grant Thornton. "The optimism sprang from the experience in the last two years, when there was a big interest in inbound deals from Japan, the US and Europe, riding on the India growth story."
Value of inbound deals fell sharply to $7 billion compared with $29 billion in 2011 and $9 billion in 2010. "The triggers (for the slowdown) were there from the first quarter, when the GDP growth slowed. The second trigger was the Vodafone tax issue, and the GAAR amendments proposed in the Budget. The issues surrounding telecom were a dampener, too."
But the year has been a landmark one for corporate India, when companies that borrowed heavily to fuel expansion came in for a reality check, bogged down by slowing cash flows and high interest rates. Mounting debt also forced some promoters to sell part of their assets. Vijay Mallya, who shut down operations of his ailing airline Kingfisher, sold 53 per cent in United Spirits to Diageo for around $2 billion while Kishore Biyani sold a controlling stake in Pantaloon to Aditya Birla Nuvo in a Rs 1,600-crore deal.
- Smriti Irani campaigns in Amethi, attacks Rahul for lack of progress
- Candidates steering towards auto unions to rev up support
- ‘Will send builders of illegal structures to jail’
- To root out corruption, vote for change and give the new face a chance, says Bains
- Green campaign: Phoolka to ride cycle, Bittu talks of birds
- SUV driver hits car, tries to run over inspector at naka; cases registered