India defies global slump with a record dealmaking spree in Q2
Published On: Tuesday, June 28, 2022 | By: Team KnowMyStock
While dealmaking elsewhere in the world slows to a crawl bankers in India recorded their best-ever quarter for mergers and acquisitions. India saw $82.3 billion pending and completed M&A deals in the second quarter, the highest amount on record, according to data compiled by Bloomberg. That’s more than twice as much as the previous record of $38.1 billion in the third quarter of 2019. Globally, M&A volume in the quarter reached $827.6 billion, down 8.7% from the same period in 2021. The surge in India was dominated by HDFC Bank Ltd.’s $60 billion all-stock purchase of Housing Development Finance Corp. in April, combining India’s most valuable bank and largest mortgage lender in the country’s biggest-ever M&A transaction. The move illustrated how India’s flagship companies, facing disruptive trends such as the rise of fintech and climate change, are turning to dealmaking as a tactic to dramatically reshape themselves.
The combination of Mindtree Ltd. and Larsen & Toubro Infotech Ltd., two software firms controlled by engineering conglomerate Larsen & Toubro Ltd., in a $3.3 billion all-stock deal announced in May further illustrated how India’s largest firms are positioning themselves for a changed landscape in technology, aided by volatility in the markets.
Companies in India leading the shift to renewable energy were among the biggest dealmakers. Shell Plc agreed to buy renewable power supplier Sprng Energy Pvt for $1.5 billion in April, while French oil giant TotalEnergies SE purchased a 25% stake in Adani New Industries Ltd. this month. The firm plans to invest more than $50 billion in technologies such as green hydrogen over the next decade.
The next wave of deals could come in the mid-market, where a cohort of aging founders is starting to hand the reins to their offspring.
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