Tag: acquisition

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. Read more

Shares of Persistent Systems jumped 6 percent to Rs 3755 on the BSE in an intra-day session on Thursday after the company said its US subsidiary will acquire North Carolina-based Software Corporation International (SCI) and its affiliate, Fusion360. Persistent also acquired New Jersey-based Shree Partners and its India subsidiary Shree Infosoft for $6.87 million. Persistent will be acquiring 100% in both these companies for a cash payment of $53 million for SCI and $6.87 million for Shree’s US and Indian business. For SCI, Persistent would be paying $34.45 million upfront and $5.96 million per annum over the next two years. Also, Persistent would pay $2.21 million per annum for three years to retain key employees. To acquire Shree Partners, an upfront payment of $3.37 million and $1.5 million per annum will be made over two years. Another $500,000 would be paid to retain employees over the next three years. Read more

Today (29th Sept. 2021) Piramal Enterprises said that it had completed the acquisition of Dewan Housing Finance Limited (DHFL) by paying the consideration amount of Rs 34,250 crore. This marks the first successful resolution of a financial services company under the Insolvency and Bankruptcy Code (IBC). The total consideration paid by the Piramal Group of Rs 34,250 crores at the completion of the acquisition, includes an upfront cash component of Rs 14,700 crores and issuance of debt instruments of Rs 19,550 crores (10-year NCDs at 6.75% p.a. on a half-yearly basis). Read more

The HDFC Life today(3rd Sept.2021) said it will acquire a 100 percent stake in Exide Life Insurance Company for Rs 6,887 crore from Exide Industries Ltd (EIL) and subsequently, it will be merged with HDFC Life, subject to regulatory approvals. This marks one of the first and the largest acquisitions in the life insurance space, which has 23 private players and one state-owned insurer - Life Insurance Corporation (LIC). Previously, HDFC Life had intended to acquire Max Life but the deal did not go through because of regulatory hurdles. Experts said this deal will, however, is not expected to face any such regulatory hurdles. Read more

Indian conglomerates bought and sold companies in record-breaking deals despite a majority of smaller firms ending the year on a dull note. Many corporate India is ending 2020 with battered sales and profits due to the pandemic while a few top companies saw a phenomenal rise in their market valuation. The year 2020 will be remembered for the billions of dollars’ worth of investments reported by Reliance Industries by selling a stake in its telecom services arm, Jio Platforms. As soon as the Mukesh Ambani-led firm stopped selling stakes in Jio, global investors queued up to invest in its organised retail arm, making the company virtually debt-free. Backed by billions of dollars of investments from marque global investors, Ambani then acquired Future group’s entire retail and wholesale business for Rs 25,000 crore, giving the group a significant lead in organised retail. Read more

Shares of Hindustan Aeronautics (HAL) rallied as much as 10.5 per cent and hit a fresh 52-week high of Rs 1,126 on the BSE on Wednesday after the Ministry of Defence (MoD) on Tuesday approved the acquisition of 'Make in India' equipment worth Rs 8,722 crore required by the Indian Armed Forces. HAL stock price has rallied over 151 per cent from March lows of Rs 448 apiece and the total market capitalisation of the company stands at Rs 36,949.82 crore. The Defence Acquisition Council held meeting with Defence Minister Rajnath Singh, accorded approval for capital acquisitions of various platforms and equipment required by the Indian Armed Forces. Proposals for an approximate cost of Rs 8,722.38 crore were approved. DAC approved procurement of 106 basic trainer aircraft from HAL to address the basic training requirements of the Indian Air Force. It also added that post-certification, 70 BTA will be initially procured from HAL and balance 36 after operationalisation of HTT-40 fleet.

The top four Indian IT firms have a cash reserve of close to $15 billion. Market leader Tata Consultancy Services has around $5.9 billion, while it is around $3.6 billion for Infosys. Wipro is sitting on close to $3.4 billion, while HCL Technologies has $1.75 billion. As growth slows owing to the pandemic, these cash-rich tier-I IT services companies are pursuing organic growth, including acquisition, indicating a change in capital allocation policies. Apart from mergers and acquisitions (M&As), even large rebadging deals (outsourcing work while reducing employee strength) and buying out captives of global firms are part of these initiatives. This is being done to drive revenue growth at a time most firms posted a revenue decline in sequential terms in Q1 of FY21, which is traditionally considered to be a strong quarter for IT services companies. Read more