M&A Magazine

With changing demographic profile of India, rapid urbanisation, spread of digital payments and increasing purchasing power, the retail sector is poised for a quantum leap. India is becoming one of the largest preferred retail destinations globally. The early indications are showing up now. In 2018, the retail sector received a record level of foreign direct investment ( FDI ) as a host of international companies have invested in India through mergers and acquisitions. Partnerships and acquisitions will gain traction as more players look to gain access to new capabilities in this space. Over the last two decades, the Indian retail industry has seen significant changes, evolving rapidly from traditional shops to large multi-format stores offering a global experience. The rapidly changing dynamics resulted in unprecedented growth in overall consumption with numbers suggesting that consumer expenditure in India is expected to almost double to $3,600 billion by 2020 from $1,824 billion i...

Mergers and acquisitions (M&A) have got a leg up, thanks to rising cases filed under the Insolvency and Bankruptcy Code (IBC) . Till the last count, M&A deals in distressed asset sales worth around $14.3 billion were done since the code became functional in December 2016, according to data from Kroll and Mergermarket. Such sales will rise as more and more companies line up to face the new bankruptcy law. Data from Insolvency and Bankruptcy Board of India show that more than $26 billion in distressed steel assets are coming on block, while banks are unwilling to take more haircuts and more companies will be put under the IBC and make their way through the NCLT process. In fact, opportunities for investors and acquirers have grown as quality assets at attractive valuations come to market. Distress M&As account for 12% of the total M&A value this year, led by deals involving Bhushan Steel ($7.4 billion).  In terms of actual deals, distressed M&As has ac...

Ever since the government introduced the bankruptcy law, host of companies right from steel, power, cement and construction have put their distressed assets on sale and potential bidders are chalking out deals to snap up assets of loan defaulting companies. The wave of deal-making can push mergers and acquisitions (M&A) at a record high level this year. With banks pushing for change in management of loan defaulting companies, that will result in bigger corporate assets which will be available for acquisition at a throw-away price. Swift, time-bound resolution or liquidation of stressed assets will be critical for de-clogging bank balance sheets and for efficient reallocation of capital. Stressed assets are in multiple sectors, so M&As are expected to happen in multiple sectors. Rising stressed assets with banks The Reserve Bank of India has mandated early bankruptcy resolution of 12 cases, which account for a bulk of the stressed assets of banks.   These cases ar...