Undeterred by COVID-19, M&A and PE deals in India rose 7% to $80b in 2020: PwC

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Despite multiple concerns including the COVID-19 pandemic, macroeconomic outlook and geopolitical tensions, deal values in 2020 nearly retained momentum with the previous year, recording 1,268 transactions worth $80 billion, up 7% from 2019, said a PwC India report released Wednesday.

25% of this deal value could be attributed to sizeable inbound investments in Jio Platforms. In terms or volume, the number of deals dropped significantly from 1,945 transactions last year.

M&A accounted for over 50% of the total deal value this year, while private equity (PE) activity kept pace with last year, recording investments worth $38.2 billion.

Domestic consolidation continued to drive M&A activity in India, accounting for nearly 50% of the total deal value this year. Given the volatility, uncertainty and complexity of the current times, PwC expects this trend to continue.

“The lockdown in India severely impacted almost every sector. Several discretionary consumer businesses in the retail sector struggled to stay above water, creating a number of consolidation and expansion opportunities. Reliance Retail Ventures acquired the retail, wholesale, logistics and warehousing businesses of Future Group for $3.3 billion. The acquisition was the largest domestic deal recorded in 2020,” the PwC report said.

On the PE side, the number of buyouts witnessed a sharp decline compared to 2019. “This could be due to the risk-averse approach adopted by several funds earlier this year, as well as the need for smaller rounds of cash infusion in cash-strapped businesses. Steered by the need for value creation, preservation and enhancement, control will be a key element for most investors in future,” PwC said.

Venture capital (VC) funds, early-stage investments maintained levels with previous years.

“Global investors reiterated confidence in India’s start-up space as well as entrepreneurial capabilities, and were quick to address any gaps created by international conflicts,” the report said.

PE funds infused nearly $5 billion in the real estate sector this year. 60% of the investment was on account of Brookfield and Mitsui’s investments in

RMZ Corporation. Excluding these deals, investments in real estate remained muted.

According to the report 2020 was a record year for PE investments in the healthcare and life sciences segment. Pharmaceuticals accounted for a majority of the $2.5 billion invested in this sector.

The continuing NPA crisis challenged investments in the financial services space which recorded a 43% decline in investment values as compared to last year.

Education emerged as a major investment destination this year, with investments worth $1.3 billion, mainly on account of noteworthy investments in Byju’s. “EdTech has been an area of focus for investors this year, particularly with the pandemic driving the need for continuing education through online/virtual classes,” the report said.

Manufacturing will be another key sector going forward, particularly in realising the Government of India’s vision of making India self-reliant, said PwC.

“Additionally, investments in the infrastructure segment would provide much-needed support in transforming India into a global manufacturing hub. This would require adequate focus and diversion of a large amount of capital towards rural infrastructure, digital enablement and upskilling. A number of global corporations across sectors like automotive, electronics, healthcare, chemicals and food processing have already set up manufacturing operations in India and we could expect several others to follow suit,” the report said.

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.