Hotline: 1800 102 2007
Hotline: 1800 102 2007
Search Business Opportunities
consumer products 2018-09-06

Why Consumer Products And Retail Is The Most Favored Sector

2Q18 Recorded Highest Quarterly Deal Value With US$34.8 Billion Across 273 Deals In India

By Content Writer
Why Consumer Products And Retail Is The Most Favored Sector

According to EY’s 30th Transaction Quarterly, M&A activity in India saw a significant y-o-y jump in both deal volume and disclosed deal value in 2Q18. While deal volume rose by19% to 273 deals, on a y-o-y basis, the disclosed deal value was 6.8x at US$34.8 billion in comparison to US$5.1 billion in 2Q17. This difference can mainly be attributed to the six big ticket deals (>US$1 billion) in 2Q18. The biggest deal in this quarter was the US$16 billion acquisition of Flipkart by Walmart Inc, which accounted for 46% of the total disclosed deal value.

Commenting on M&A Scenario, Amit Khandelwal, Managing Partner, Transaction Advisory Services, EY, said, “M&A activity is expected to stay positive in the coming quarters, on the back of continued interest of financial and strategic investors in the Indian market. Domestic activity should strengthen further as players across sectors look to expand scale, de-leverage balance sheets and innovate their offerings through increased usage of new technologies. The restructuring deals will remain active in the coming months as the NPAs cleaning is a high priority for banks. Furthermore, the successful resolution of certain cases recently, with healthy recovery rates under the IBC, along with the implementation of project ‘Sashakt’, will further add to the pipeline.”

Cross-border activity made the headlines with inbound activity taking the lead
Cross-border M&A activity in 2Q18 was a record high as the inbound deal value reached US$23.2 billion across 69 deals, on the back of the Walmart-Flipkart deal. Even after excluding the above-mentioned deal, the inbound activity remained impressive with 68 deals worth US$7.2 billion, highlighting the difference from the last few quarters and reinforcing the confidence in India’s growth story. The outbound activity (34 deals; US$990 million) also showed y-o-y improvement in both value and volume terms but was sub-par when compared to the long-term quarterly average.

Domestic M&A market continued to perform well

While the inbound activity led in terms of deal value, the domestic activity was ahead in volume terms and recorded a significant y-o-y jump both in the deal count and disclosed deal value. The domestic landscape witnessed 170 deals with a disclosed deal value of US$10.6 billion compared with 152 deals with US$1.8 billion in 2Q17. Consolidation, anchored on portfolio reviews and increased focus on core businesses, and balance sheet de-leveraging remained the key deal drivers in the domestic arena.

The US remained the most active cross-border partner
The US continued to be the most active cross-border M&A partner for Indian companies during the quarter, with a total of 26 deals (18 inbound and 8 outbound deals) for a total disclosed value of US$16.6 billion. Japan, the UK and the Netherlands emerged as other key partners with investments across sectors.

The ongoing M&A momentum to continue in the coming months
The transition of India’s economy towards a formal structure, coupled with healthy deal market fundamentals and the authority’s commitment to the IBC, should support the deal-making in the short-term. While the resolution process of stressed assets can witness certain challenges such as differences over valuations and lack of interest, especially in old/poor quality assets, the overall environment looks positive, given the successful resolution of certain stressed assets recently and continuous regulatory support. On the cross-border front, we expect inbound activity should carry the momentum in the coming months, while a sense of caution can prevail on the outbound front.

star franchise india
Related opportunities
  • Others Food Service
    ABOUT Us: Chicken Adda is best described as indescribable. Sometimes it's..
    Locations looking for expansion Madhya Pradesh
    Establishment year 2015
    Franchising Launch Date 2016
    Investment size Rs. 5lac - 10lac
    Space required 200
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater Indore Madhya Pradesh
  • Others Food Service
    Zing Kitchens is a unique business proposition for new entrepreneurs..
    Locations looking for expansion Haryana
    Establishment year 2011
    Franchising Launch Date 2019
    Investment size Rs. 30lac - 50lac
    Space required 700
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Gurgaon Haryana
  • Diamond & Platinum Wears
    About Us: Aayra is synonymous to imagination, inspiration and innovation. It..
    Locations looking for expansion Maharashtra
    Establishment year 2012
    Franchising Launch Date 2019
    Investment size Rs. 1 Cr. - 2 Cr
    Space required 300
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Mumbai Maharashtra
  • Tea And Coffee Chain
    About Us: ChaiGhar is a local finger-food and refreshment outlet that..
    Locations looking for expansion Delhi
    Establishment year 2020
    Franchising Launch Date 2020
    Investment size Rs. 10lac - 20lac
    Space required 250
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater New delhi Delhi
Insta-Subscribe to
The Franchising World
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
OR Click here to Subscribe Online
Daily Updates
Submit your email address to receive the latest updates on news & host of opportunities
More Stories

Free Advice - Ask Our Experts

ads ads ads ads