Mumbai, Nov 21 - India Inc's mergers and acquisitions (M&A) activity slowed by almost 55% to $6.2 billion during the July-September quarter of 2017 (3Q17), a report said on November 21.
Ernst & Young's recently released Transactions Quarterly Report revealed that while the volume increased to 252 deals in 3Q17 from 234 deals in 3Q16, the cumulative disclosed deal value fell to $6.2 billion from $13.7 billion.
"In the last few months, a sense of caution prevailed within the investor and business communities. The companies essentially adopted a wait and watch approach in pursuing big-ticket acquisitions," said Amit Khandelwal, Partner and National Leader, Transaction Advisory Services, EY.
"However, the market witnessed healthy activity in smaller value deals. Consequently, 3Q17 witnessed a fair increase in deal volume while deal value reduced compared with the same period last year.
According to the EY report, the domestic deal activity remained stable in terms of volume, indicating that the local market remained the preferred destination for businesses.
"However, the deal value saw a significant decline as only two mega (billion-dollar-plus) deals were reported during the quarter, unlike four in 3Q16," the report said.
Cross-border M&A activity remained quiet during the quarter, with the total disclosed deal value recording a decline of 80.5% year-on-year, primarily led by lesser big-ticket inbound investments, highlighted the report.
"The US continued to be the most active cross-border M&A partner for Indian companies during the quarter, with a total of 27 deals (20 inbound and 7 outbound deals) for a total disclosed value of $113 million," it said.
The UK and Singapore emerged as other preferred partners with investments across sectors, according to the report.
From a sector perspective, technology led the activity, both in terms of value and volume with 33 deals totalling to $3.8 billion, followed by financial services, recording 32 deals with a disclosed value of $291 million, the EY report added.