The slowdown in the Indian economy has been felt by the Indian legal market, with M&A activity for this quarter dropping by 63.4% compared to last year’s third quarter.
As evaluated by Mergermarket, the deal value for Q3 2017 was $6.8 billion, compared to $18.5 billion in the corresponding period last year. The number of deals recorded this quarter (54) is the lowest since 2009, when 51 deals were recorded. A significant factor for the same is the decrease in India’s GDP to 5.7%.
Despite the drop compared to last year, this quarter’s performance has still been better than the Q3 numbers for 2013-2015.
Sector-wise
The Telecom sector continues to rule the roost for M&A activity this year, thanks largely to the Vodafone-Idea merger. The sector has recorded a deal value of $14.8 billion so far this year.
Technology is the sector that has witnessed the second most activity. In the third quarter alone, its deal value increased four times, compared to Q3 2016. The top deal in the sector this quarter was SoftBank’s acquisition of a 20% stake in Flipkart for$ 2.6 billion, the second largest deal in India this year.
Another sector that has done well this year is Industries & Chemicals, which recorded 41 deals at $2.2 billion.
Despite outbound M&A activity slowing down, India’s inbound activity in YTD 2017 increased by 20.5% to $16.8 billion from $14 billion from the same period in 2016, which is the highest value since 2011.
The Indian legal market recorded its highest ever M&A activity in 2016, with 388 deals worth $64.5 billion going down in 2016. The trend continued in the first quarter of 2017, where the highest Q1 deal value since 2012 was recorded. However, the slump has coincided with the decrease in the GDP, which experts say was caused to a large extent by the Centre’s demonetization move late last year.
As reported earlier, AZB & Partners topped the M&A tables in terms of both deal value and deal count for this quarter.