Deal Watcher | Quarter ended 30th June, 2020

The COVID-19 health and financial crisis surfaced while investment activities were mounted on a decade long wave of growing transaction volumes. Every business, small to large, including PE/VC firms, has endured the wrath of this pandemic and is coming to the grips of the new normal with the phased re-opening of economies around the world. Six months down the line, this year has witnessed a glaring shrink in the level of investment activities with large volume deals being put-off the table or delayed. For remainder of 2020, investment and deal-making is anticipated to see a downturn till the global economic activities gain a material momentum and asset prices recover.

In the medium term, valuations are still expected to be moderate and whilst the corporate markets are attempting to stabilize, opportunities have prompted for the right set of buyers. Uncertainty over the long-term impact of COVID-19 and recovery is anticipated to act as a significant headwind to Indian investments. Firms have reassessed their investment strategy, asset allocation, financing and portfolio prioritization in order to navigate their way out of this pandemic.

In the quarter-ended June, there were over 279 private equity investments & venture capital investments with reported values of over US$ 12.15 bn, with Reliance Jio walking away with the majority share.

Key deals include:

• Reliance’s Jio Platforms raises a colossal sum of US$ 9.56 bn from a corpus of investors with the motive of transforming Jio into a multi-faceted technology giant providing a more diverse product and service ecosystem for its users.
• Piramal Pharma Ltd. secures US$ 490 mn from Carlyle Investment Management LLC for a 20% stake with healthcare being the most lucrative bet in the seam of the pandemic.

It was noticed that Information Technology and Consumer Discretionary were the most sought-after sectors (with 163 and 40 deals respectively) followed by Healthcare (34 deals), Financials (13 deals) and Consumer Staples (12 deals). We expect these sectors to outlast the novel virus and continue gaining traction for the balance of the year.

Our Deal Watcher also covers over 107 M&A transactions with Information Technology and Industrials leading the way and witnessing the highest number of deals (26 and 17 deals respectively), followed by Healthcare (15 deals), Finance and Consumer Discretionary standing at 11 deals each. Some of the prominent deals include:

• Facebook’s acquisition of 9.99% stake in Reliance Jio resulting into a starry debut for the tech-giant in the ‘Indian Telecom Space’
• The acquisition of Aircel by UV Assets Reconstruction through the resolution plans approved by NCLT

We hope that this publication will act as an augmentative read amidst efforts to figure out the post-COVID-19 deals landscape.

The KNAV Deal Watcher can be accessed by clicking here.