Dealmakers eye poll boost for $30 billion M&As in 2014

The Indian mergers and acquisitions market is likely to see increased momentum post elections and experts believe overall deal values in India could exceed $30 billion this year if Lok Sabha polls result in a stable government at the Centre.

Post-elections, the pace is expected to be greater for inbound deals, which have been largely pushed back for many months now for want of better clarity on the policy stance of new government, experts said.

The deal street in India remained moderate during the first two months of the year with only 170 deals worth $4.2 billion as cross-border activity remained tepid, as per Grant Thornton data.

There is a strong sense in the market that the situation would improve post general elections provided the new government's economic policies encourage FDI and make doing business in India easier.

Sanjeev Krishnan, Leader - PE & Transaction Services - PwC India said "if there is a stable government (BJP or any other), economic reforms would be back on the Government's agenda".

"Then India would be looked at much more positively by both strategic and PE investors.

"In terms of numbers, at the minimum, I expect overall deal values in India to exceed $30 billion this year and Private Equity investments to exceed $12.5 billion in 2014 -15. However, if a weak or significant coalition dependence emerges, the numbers could be much lower," he said.

Echoing similar sentiments, Girish Vanvari, co-Head of Tax, KPMG in India said: "Election outcome can be a game changer. If a stable government emerges at the Centre and the new government takes steps to demonstrate stability of tax and regulatory regime in the country, it would restore the much- needed investor confidence."

Vanvari further said that post elections "we could also see the number doubling from year on. Take an example of the recently announced Sun Pharma-Ranbaxy deal, upwards of $4 billion in one deal itself and if there are 4-5 deals like this, imagine where the numbers can be."

The increasing political uncertainty over the past one year alongwith a fear of a fractured mandate and policy paralysis perception have resulted in creating a cautious approach among strategic players, experts believe.

"The year 2014 is being anticipated to be a big year for M&As, especially for big-ticket deals. However, most of it is expected to take off post the general elections," Sumant Sinha, Chairman and CEO, ReNew Power said.

Consumer, healthcare, metals, real estate and telecom sectors might see the biggest share of deals taking place, he added.


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