At $11.5 billion, the technology, media and telecom (TMT) sector leads the M&A market in India. TMT claimed six of the top 10 largest deals in the country in Q1 2022 and is poised for a solid year ahead.
Recall PVR’s merger with Inox? The $1.6-bn transaction will make PVR the largest multiplex chain operating in India. Meanwhile, Vodafone’s sale of 21 per cent of its residual stake to Indus Tower comes close at $1.5 bn.
With strong interest from foreign buyers, India’s M&A market has also been performing well (the US accounted for 35 per cent of invested dollars). India’s economy is set for robust growth in 2022 — the IMF has projected 8.2 per cent GDP growth in 2022, making it the fastest-growing major economy and doubling the expected pace of growth in China.
With 174 total deals in Q1 2022 (up 28 per cent year-on-year), the stage is set for the Indian M&A market to witness a strong performance powered by technology. This will make the M&A management process more efficient. For example, dealmakers see, in real time, how artificial intelligence and machine learning is automating many of the time-consuming parts of M&A— from preparation and marketing to due diligence, for both sell side and buy side.
According to Datasite, a leading SaaS-technology provider for the M&A industry worldwide, deal activity through January-May 2022 shows that companies are continuing to invest in acquiring technology, as they pursue digital transformations accelerated by Covid-19. Dealmaking on the Datasite platform shows that new global TMT projects rose 18 per cent globally in Q1.
Additionally, while due diligence times across all industries dropped last year, this year the opposite is true. The median length of time for a new deal, or asset sale or merger, to launch and close on Datasite has increased by five per cent year over year so far this year, while deal preparation time is also rising, up 31 per cent, over the same period. This means many dealmakers are ‘ready to go’ but haven’t launched their projects just yet. We are also seeing the rate of Q&A between potential buyers and sellers climb, as dealmakers focus on uncovering anything that could lead to post value deal destruction.
Source: Economic Times