We are pleased to present the annual edition of SKP Investment Chronicle – our update that focuses on the deal-making landscape in India, comprising Mergers and Acquisitions (M&A), equity investments and exits. In this report, we look at India's transactions arena in the year 2018.
With stable GDP growth, reviving economy from setbacks of policy reforms and investor confidence, India has emerged as one of the fastest growing economies in the world and one of the most attractive investment destinations. Driven by bigticket transactions and strategic consolidation, 2018 has been a phenomenal year as total transaction value crossed the USD 100 billion mark. Although aggregate deal value has escalated owing to a handful of big-ticket transactions, deal volumes have been on a downward trajectory in 2018 over the previous year.
Mergers and acquisitions emerged as the forerunner of investment activities in 2018, contributing ~ 70% of the total deal landscape value. Owing to a slew of transactions crossing the USD 1 billion mark, including India's biggest M&A deal till date, the declining performance of domestic and inbound deals from 2017 witnessed a commendable surge in this year. Geographic expansion, consolidation and stressed assets sale were some of the key drivers behind the big-ticket transactions.
Although equity investments observed a decline in terms of aggregate value and volume, global private equity funds, pension funds and sovereign wealth funds have demonstrated their confidence in India through sizeable investments and buyouts in 2018. Private equity exits, on the other hand, continued with their stellar performance of 2017 demonstrating stabilizing valuations and lucrative returns on investments.
Anticipation on the outcome of the upcoming general elections and ensuing fiscal budget and business policy reforms in the coming year will be key in driving investor sentiments in the short term. Although the year may begin on a cautious note, the deal landscape is expected to maintain traction as investors continue to remain motivated by the vast potential of the Indian market and increasing investment opportunities.
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