M&A Magazine

In the Indian e-start-up business space, Quikr has become everyone's envy. The pace at which it is acquiring companies to grow and diversify is remarkable. Since January last year, it has acquired around 8 companies, and the latest, it is buying two arms of HDFC's brokerage business – HDFC Realty and the digital business HDFC Red in an all-stock deal. It is estimated that the deal would be pegged around Rs 400 crore. In return, HDFC Ltd, the housing finance arm of HDFC Bank, will pick up 5% stake in Quikr, a leading online cross-category classifieds platform. The valuation of Quikr, one of a handful of homegrown unicorns (start-ups worth $1 billion), is pegged at around $1.5 billion, or around Rs 10,000 crore. The acquisition of these two arms of HDFC Ltd will help Quikr to scale up its business as it strives to get into potential business areas like real estate, automobiles, jobs and other customer-related services. The acquisition will also help Quikr to generate l...

Arvind L imited is engaged in the business textiles, fashions, engineering business and other business. The company is a leading fabric and apparel supplier to world’s top brands and a prominent technical textiles player. Arvind Fashions Limited (AFL ) is a leading branded apparel and accessory platform. Branded apparels (comprising 30-40 percent of the total consolidated revenue) reported an impressive set of numbers in terms of turnover and operational efficiency. Engineering business has shown impressive revenue growth, is debt free and has good EBITDA margin in all segments of the company TRANSACTION Arvind Ltd has decided to demerge and publicly list its branded apparel and engineering businesses to focus more on its core textiles business.  Demerger of the branded apparel and engineering arms of the company, thereby creating two new listed companies by the name of Arvind Fashions and Anup Engineering, respectively. Currently, branded business is carried out as a di...

The long time discussed subject of credibility of the resolution process under the Insolvency and Bankruptcy Code,2016, which is dependent on the sustainability of the Resolution Plan and credibility of the Resolution Applicant, is now settled by the Insolvency and Bankruptcy Board of India(IBBI) by introducing amendment regulations to the Corporate Insolvency Resolution process on 7 November 2017 and subsequent Ordinance passed by the Central Government on 23 November 2017 on the subject. A key objective of the Insolvency and Bankruptcy Code , 2016 is insolvency resolution of corporate persons in a time bound manner for maximization of value of their assets. This objective would be achieved only if a resolution process ends up with a credible resolution plan that maximizes the value of assets of the corporate debtor, that is, the plan has been drawn up realistically and would be implemented successfully. Though there is no restriction on as to who can submit a resolution plan, i...

ADANI Enterprises Ltd. (AEL) is primarily engaged in coal mining and trading, oil and gas exploration, ports and multi-modal logistics, power generation and transmission, gas distribution and edible oil and agro commodities businesses in India and globally. Further company owns and operates solar power plants with an installed capacity of about 1000MW in various parts of the country through its subsidiaries. Prayatna Developers Private Limited (PDPL) is developing 220 MW of solar power projects which are under various stages of implementation. PDPL is a 100% subsidiary of Adani Enterprises Limited. Adani Green Energy Limited (AGEL) owns and operates solar and wind power plants through group of its subsidiaries. The company is associates of AEL holding 47.19%. TRANSACTION Adani Enterprises will demerge its renewable energy business into associate company Adani Green Energy Ltd to simplifying the business structure.  The businesses of development of renewable power p...

Oricon Enterprises Limited (OEL) , the flagship company of Parijat Enterprises is currently in real estate, marine logistics, packaging, petrochemicals and automobile dealership. The company’s equity shares are listed on BSE & NSE and having market cap of around Rs. 922 crore. In September 2006, OEL entered into a 30:70 joint venture with Navigate Mauritius Ltd. – a private equity investor, for its packaging division named as Oriental Containers Ltd (OCL) in which the packaging division was hived off.  The company acquired 70% equity stake of JV partner on March 2015 making OCL Wholly Owned Subsidiary (WoS) of OEL. OCL is largest manufacturer of metal and plastic closures having manufacturing facilities in the state of Maharashtra and Goa with aggregate capacity of 19.27 billion caps for bottles and Aluminium Collapsible Tubes (as per company’s records). The NCLT has recently approved the Scheme of Amalgamation of Oricon Properties Private Limited 100% WoS of OE...

Globally, the year 2017 has seen spurt of mergers and acquisitions in the insurance industry because of ongoing pressures of tepid growth in premiums, low interest rates and the burden of regulatory requirements. A research done by Willis Tower Watson and Mergermarket says total deal value increased by 170% between the first half of 2016 and first half of 2017. The jump in megadeals has come amid a stronger global economy as well as defensive plays as big firms look to ensure they stay ahead of competition. The United States is the top national destination for acquisition, followed by China. The US insurance sector announced deal value of $10 billion in the first half of 2017, compared to $3 billion during the same period last year. Another survey by KPMG shows that Western Europe is seen as the region with the most assets up for sale, led by the United Kingdom, Italy and Spain, 48% of respondents selecting it as a divestiture opportunity for their companies. The report found tha...

The banking industry is largely fragmented in India with more than half of the commercial banks being state-run entities. Also amongst them, only two of them figure among the world’s 100 largest banks. Besides, there have not been many mergers in Indian banking space and the merger of ING Vysya Bank with Kotak Mahindra Bank is one of the major deals since private sector leader ICICI Bank’s takeover of Bank of Rajasthan about four years ago and Axis Bank acquiring erstwhile UTI Bank.  The Kotak Mahindra and ING Vysya,   both are private sector banks, run by professional managers, and similar in size with a degree of commonality in business and risk approaches. The merger of ING Vysya Bank with Kotak Mahindra Bank is one of the major deals in the private sector banking space The Deal: The proposed merger is an all-stock merger. 1000 shares of Rs.10 each of ING Vysya will receive 725 shares of Rs.5 each of Kotak Mahindra Bank. This exchange ratio indicates an i...

About thirteen years back when an article was penned in this magazine ( ‘ Bank Mergers  - The fall out and shape of things to come’ –M&A Critique Issues October to December 2004), it was foretold that eventual mergers of Public Sector Banks (PSBs) in India was an economic necessity for becoming globally competitive by acquiring the required critical mass. This fond hope was cherished not as a pipe dream or as a wishful thinking but as an ultimate global survival strategy. It was founded on a strong belief and repeated aversions from the Committees on Banking and Financial Sector Reforms, to have not more than three or four large public sector banks by merging the existing ones. The Finance Ministers, regardless of their political affiliations have invariably lent their lip sympathy to PSB mergers. Even today the economic compulsions to become true global players by taking the inorganic growth route remain the same but it is now evident that the socio-political ground have no...