Here’s How M&A Deals Increased Over the Pandemic

Investors had set high expectations for 2020 but everything got in vain owing to the epidemic. The Indian business market immensely suffered and bigger business transactions did not take place. At this need of hour, companies waited for miracles while others believed in becoming changemakers. Proactiveness and adaptability were skills that help overcome challenges in the long run.  According to a report by PwC India, dependency on technology accelerated over the last year (2020) and liquidity became a growing pain point simultaneously.

Despite concerns around macroeconomics, corporate governance, changing regulatory norms, geopolitics and global tensions, deal values in 2020 nearly retained momentum withthe previous year. 

The report states that in aggregate, deal values amounted to little over $80 billion across around 1,268 transactions, which is a 7 per cent increase in terms of value as compared to 2019. However, 25 per cent of this deal value could be attributed to sizable inbound investments in Jio Platforms. Strategic deals (mergers and acquisitions) accounted for over 50 per cent of the total deal value this year, while private equity (PE) activity kept pace with last year, recording investments worth $38.2 billion.

Acquisition of Future Group for $3.3 billion by Reliance Retail Ventures and a large array of mergers occurring in the banking sector are significant mergers and acquisitions happening in 2020. Such drastic moves altered retail as well as the banking sector of the country. M&A transactions continued to thrive in the country, therefore, accounting for approximately 50 per cent of the total deals valued in the previous year.

Many big as well as small firms were doomed in the unfateful year. Such conditions suppressed the market and investors, thus, engendering doubts if the Indian market will ever arise again. Anticipations were higher when the first lockdown was completely lifted; no one had expected that they could be one again in the first quarter of 2021. After the implication of a second lockdown, people as well as companies adapted to the grim situation easily. This also gave a cue that circumstances are unpredictable and everyone would have to presume living with the health crisis.