Magazine article Global Finance

Slackening M&A May Pick Up as Monetary Policy Eases

Magazine article Global Finance

Slackening M&A May Pick Up as Monetary Policy Eases

Article excerpt

INDIA

Corporate dealmaking in India has declined in the period of the year through October 201 1 .According to global consulting firm Grant Thornton, domestic and crossborder mergers and acquisitions by Indian companies totaled $33.6 billion - down from $42.9 billion in announced deals during the same period in 2010.This is a 22% fall year-on-year.

The top five deals accounted for 79% of deal flow. However, private equity deals have continued to grow, reaching $7.2 billion to October 2011, compared to $4.9 billion over the same period last year - a growth of 47%. The manufacturing sector was the most active, followed by IT and healthcare.

Corporate dealmaking has been stymied by relatively high interest rates and the resultant high cost of finance, but that may soon change. The Reserve Bank of India (PvBI) could start easing its tight monetary policy in December or January, according to the prime minister's Economic Advisory Council, which noted in a recent release that inflation is likely to decline, and a reversal in monetary policy could follow. …

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