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THE number of mergers and acquisitions (M&A) and private equity (PE) transactions in India jumped 50% in the month of October this year over the corresponding period last year, led by sharp rise in PE deals. But the total value of deals during the month slipped by 28% to $1.8 billion compared to the year-ago period due to absence of large transactions.

The number of M&A & PE deals together stood at 57 in October this year as against 38 recorded in the year-ago period, as per the latest data compiled by advisory firm Grant Thornton.

Says CG Srividya, partner (specialist advisory services) at Grant Thornton: “Private equity is sustaining high levels of activity with $1.3 billion worth of deals during this month, primarily coming from qualified institutional placements (QIP).” The volume of PE transactions more than doubled during the month to 29, led by seven QIPs worth $1 billion. Under a QIP, a public listed company issues fresh shares to a group of institutional investors to raise funds. Added JM Trivedi, partner, Actis Advisers, “Activity in the private equity space has picked up over the last few months. With the domestic economy showing clear signs of recovery, business leaders have more clarity in future growth.”

Deal volume in the M&A space, where one strategic acquirer buys an equity stake in another company, have been driven primarily by inbound transactions where multinationals buy stake in Indian firm besides domestic deals between two local firms. Of the 28 M&A deals, 17 were sealed in the domestic space.

Some of the prominent M&A deals sealed this October are Tata Motors’s acquisition of Hispano Carrocera S.A (HC) in the manufacturing space and Essar Services Holdings’ acquisition of Ismart Timex in the IT/ITeS space, respectively.

The slowdown in deal activity, since March 2008, was linked to global credit crisis which dried up funding for acquisitions. The total number of M&A deals during the first 10 months of 2009 stood at 234 deals with an announced value of $7.66 billion as against 405 deals amounting to $27.12 billion during the corresponding period in 2008. In terms of PE transactions, there were 185 deals signed with an announced value of $8.67 billion as against 273 deals worth $9.49 billion recorded during the year-ago period.

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