Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: 4.8
Article rating: 5.0
Article rating: 3.0
Article rating: No rating
Article rating: 5.0
Article rating: No rating
Article rating: No rating
Article rating: 4.5
Article rating: No rating
Article rating: No rating
Article rating: 4.2
Article rating: 5.0
Article rating: 4.0
Article rating: No rating
Article rating: No rating


Distressed asset sales 3% of overall M&A in 2017: Report

Author: PTI/Tuesday, October 30, 2018/Categories: Corporate

Distressed asset sales 3% of overall M&A in 2017: Report

Mumbai - The first year of the bankruptcy laws has seen many investors setting up special vehicles to snap up distressed assets, which constituted 3% of the entire mergers and acquisitions in the year, says a report.

Total distressed asset merger & acquisitions has totalled USD 14.3 billion, led by deals like Bhsuhan Steel (USD7.4 billion), Reliance Communications (USD 3.7 billion) and Fortis Healthcare (USD 1.2 billion), financial consultancy Kroll said in note Monday.

"In terms of actual deals, distressed M&As accounted for 3% of total M&A volume in the market. This was only 21 of the total 623 deals completed since 2017," it said.

The consultancy, however, said the M&A opportunity will only grow from here given the size of the distressed market in the country.

The report said many companies in manufacturing, textiles, consumer and metals are over leveraged and can end up at national company law tribunals (NCLTs) for resolution.

It added steel, power, real estate and infrastructure companies are "prime candidates" for bankruptcy referrals.

As for investor groups, it said so far domestic dealmakers have led the distressed M&As, accounting for 90% of the deals by value and 81% by volume.

Foreign investors have played a "silent role" thus far with Malaysian IHH Healthcare and Singaporean Wilmar International's USD 122 million deal to acquire Shree Renuka Sugars, it said.

However, stage is being "set for a change" and the "next scene could see a very different set of investors begin to participate", it said, pointing out to reports of private equity majors KKR and Blackstone waiting in the sidelines.

However, it also said without a clear rationale and ability to carry out effective due diligence of target assets in a "market already notorious for being shrouded as well as lack of working knowledge of the regulatory system, foreigner may continue to be at the sidelines.

The report said in addition to the over 900 cases already admitted to NCLTs, another 600-1,000 are expected to bankruptcy courts in the next 12-18 months.

Print Rate this article:
No rating

Number of views (383)/Comments (0)

rajyashree guha


Other posts by PTI
Contact author

Leave a comment

Add comment



Ask the Finapolis.

I'm not a robot
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest



The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free