Privatisation helps M&A scene, value rises by 45%

Privitisation drive dominated the mergers and acquisitions scene in 2002, with the total value of deals up 45 per cent at Rs 39,200 crore, i...

Privitisation drive dominated the mergers and acquisitions scene in 2002, with the total value of deals up 45 per cent at Rs 39,200 crore, independent tracker India Advisory Partners (IAP) said.

The number of deals also rose, up 66 per cent at 676, with a bulk of them involving Indian companies, although the number of deals involving foreign firms also continued to grow, IAP said in a report on Monday.

But the figures are below the 2000 peak of 801 deals worth Rs 42,903 crore, IAP said, forecasting that this year’s score card was also likely to be modest. “India’s relatively robust underlying economy is likely to support an active, if modest, M&A marketplace over the coming year as foreign and domestic groups continue to consolidate and rationalise their business portfolios,” it said.

It said the chances of deal volumes returning to peak levels of 2000 would depend on the government’s ability to restart its privatisation programme, especially in the oil and gas sector. The privatisation drive began with a bang in 2002 but hit a roadblock in September when ministers within the government opposed selling stakes in two cash-rich oil firms.