Annual Dealtracker 2021

Deals
Revenue Growth
Annual Dealtracker 2021 Consolidation
M&A and private equity deal insights
16th annual edition

Contents
Foreword 03
Key highlights 06
Deal snapshot 2020 08
Year-on-year performance 13
Mergers and acquisitions dealscape 16
Regulatory and economic outlook 38
Private equity dealscape 50
Start-up India 58
Sector spotlight 69
Sectors attracting big-ticket deals 82
Disclaimer
This document captures the list of deals announced based on the information available in the public domain. Grant Thornton
Bharat LLP does not take any responsibility for the information, any errors or any decision by the reader based on this
information. This document should not be relied upon as a substitute for detailed advice and hence, we do not accept
responsibility for any loss as a result of relying on the material contained herein. Further, our analysis of the deal values is
based on publicly available information and appropriate assumptions (wherever necessary). Hence, if different assumptions
were to be applied, the outcomes and results would be different. This document contains the deals announced and/or closed
as of 23 December 2020.
Please note that the criteria used to define Indian start-ups include a) the company should have been incorporated for
five years or less than five years as at the end of that particular year and b) the company is working towards innovation,
development, deployment and commercialisation of new products, processes or services driven by technology or intellectual
property. Deals have been classified by sectors and by funding stages based on certain assumptions, wherever necessary.
Dealtracker editorial team

Pankaj Chopda and Monica Kothari
Our methodology for the classification of deal type is as follows:

Minority stake - 1%-25% | Strategic stake - 26%-50% | Controlling stake - 51%-75% | Majority stake - 76%-99%
Maps are for graphical purposes only. They do not represent a legal survey.
Foreword
With underlying uncertainties, the overall deal

activity saw a healthy 3% increase in the
deal volumes at 1,301 deals, while values saw
significant 29% growth aggregating to over
USD 77 billion compared with 2019.
The year 2020 witnessed a pandemic like none other. As slowdown plaguing the Indian economy already prevailed.
COVID-19 spread, the world witnessed how difficult rekindling With underlying uncertainties, the overall deal activity saw
economic activity was. The coronavirus recession has inflicted a healthy 3% increase in the deal volumes at 1,301 deals,
severe economic scarring. Amidst this, uncertainty and volatility while values saw significant 29% growth aggregating to over
triggered by major political events, USA-China trade war, Brexit, USD 77 billion compared with 2019. Mukesh Amabani’s oil-to-
tensions between USA and Iran, the impact of the COVID-19 on telecom conglomerate was at the forefront of fundraising this
China’s economy, increases in oil prices, a strong dollar against year. It raised over USD 26 billion from a long list of investors,
other currencies and the imposition of new sanctions and trade including Facebook, Google, KKR and Silver Lake Partners,
barriers by nations prevailed. On the Indian economic front, in and a majority of that was announced in the first half of the
the second quarter of the 2020, India’s gross domestic product year. The chief destination of these funds was Jio Platforms,
(GDP) fell by around 24% amid the coronavirus lockdown. The which has become the country’s largest wireless carrier. In fact,
pandemic has led to an unprecedented shutdown of business, Facebook’s USD 5.7 billion investment for around 10% stake
industries and services. From manufacturing to real estate, in Jio was both the largest investment for a minority stake by
hospitality to mining, all industries and sectors have been a tech firm globally and the largest foreign direct investment
impacted as the economy records its sharpest drop in over (FDI) in Indian telecom (tech platform) ever. Barring the
four decades. Another major hindrance to deal levels this year investment in Reliance’s Jio Platform and Retail Ventures, the
was the global slowdown, which is the driving force behind the year saw a meaningful decline of 16% in deal values.
cautious approach of investors in the middle quarters.
COVID-19’s impact on Indian M&A has been a mixed bag.
Before COVID-19 came knocking, issues such as global India recorded over 350 M&A deals worth USD 37.5 billion – the
trade tensions, corporate debt distress and the economic lowest yearly volume since 2011. Domestic buyers and sellers
Deal summary Volume Value (USD mn)

Year 2018 2019 2020 2018 2019 2020
Domestic 272 255 209 34,279 16,393 16,406
Cross-border 193 177 142 37,681 9,900 21,019
Merger and internal restructuring 13 11 7 17,469 1,340 35
Total M&A 478 443 358 89,429 27,633 37,460
PE 795 816 943 20,675 32,452 40,207
Grand total 1,273 1,259 1,301 1,10,104 60,085 77,667
Cross-border includes
Inbound 101 95 66 25,746 7,905 18,076
Outbound 92 82 76 11,935 1,995 2,943
Annual Dealtracker 03
continued to dominate the M&A dealmaking space, accounting space, accounting for over 50% of total deal value in India in
for more than half of the year’s deal volume. This surge was 2020. Before the onset of the COVID-19 pandemic, the Indian
driven by consolidation to strengthen market position, financial start-up landscape was flush with cash as investors such
deleveraging, monetising of non-core assets, entering new as Chinese internet giant Alibaba, its affiliate Ant Financial
market segment, the faster pace of insolvency proceedings, and other big-ticket investors, such as Tencent Holdings and
distressed-asset sale supplying assets at attractive valuations Fosun RZ Capital, held substantial stakes in Indian start-
across core sectors and large corporations acquiring their ups. Post COVID-19, the investments were led by Sequoia,
small and vulnerable counterparts effected by coronavirus Lightspeed Ventures, IP Ventures and a host of other overseas
recession. and homegrown investors with majority participation from
the angel investor group. PE dealmaking saw 10 deals valued
In Q2 2020, regions across the globe continued to grapple over USD 1billion in 2020 as opposed to three each witnessed
with the challenges associated with COVID-19. These included in 2019 and 2018. The investor-friendly modifications to
economic turbulence, sudden spikes in unemployment rates, REIT regulations have resulted in global investors, such as
restrictions on travel and movement and the ramifications of Blackstone and Brookfield, and SWFs, such as GIC Singapore,
continued shutdown and slowdown in many sectors. Owing picking up large quality office assets to build up their REIT
to this, Q2 2020 recorded the lowest cross-border deal volume portfolios. As the economy started picking up towards the end
in any given quarter since 2011. Despite this, the cross- of third and fourth quarters, the appetite of investors was seen
border deal activity recorded over 140 transactions with deal increasing along with SWFs and strategic buyers appetite for
values worth USD 21 billion (including Jio’s ~USD 10 billion control deals and co-investment deals which supported in the
investment from Facebook and Google). The overall trend PE deal making in 2020.
witnessed can also be attributed to border tensions between
countries coupled with India’s new FDI policy, which was While early-stage companies found it difficult to attract
widely seen as being framed to avoid opportunistic takeovers funding, companies that responded to accelerating trends,
by overseas firms. Inbound deals recorded lowest deal volume such as remote working, e-commerce, and health and biotech,
at over 65, with over USD 18 billion worth deal value on the saw an uptick in investment interest. The pandemic has been a
other hand, overseas acquisitions by Indian companies boon for tech firms. Increased digital consumption has led to
saw over 75 transactions with values almost increasing by ballooning tech valuations and soaring interest in tech-based
1.5 times to USD 3 billion compared to 2019 on account of investments with the year witnessing over 75% investment in
one Haldia Petrochemical’s USD 1.5 billion acquisition of the start-ups, e-commerce and IT & ITeS sectors. Investments in
Lummus Technology. USA was the most active foreign player the banking and NBFC segments were driven by the need to
in Indian M&A this year in terms of value as well as number of tackle the impact of the COVID-19 pandemic and increase the
acquisitions, both in inbound as well as outbound segment. bank’s capital adequacy ratio, working capital and for asset
creation. The coronavirus pandemic created a demand for
Sectoral spread for M&A investments in 2020 was on par online learning and with this move, there had been surge in ed-
compared with 2019, with top deals ranging across telecom, tech sector.
consumer goods, oil and refinery, ports, finance, industrials,
real estate and technology. On the flip side, aviation, Exits, on the other hand, slowed down substantially as after
hospitality, travel and tourism, which are largely dependent of the COVID-19 lockdowns, the prevailing uncertainty increased
physical movement of people, have been disproportionately business risk premiums. Considering significant uncertainty,
impacted. This led to companies and entrepreneur universe investors that were ready to commit capital wanted to play
embracing technology and data analytics to come up with safe and were ready to do deals at valuations that were
new age business models in conventional sectors to adapt to significantly lower than what was prevailing pre-COVID-19.
the new normal of social distancing and travel restrictions. This Thus, sellers decided to defer their exit plans. While decrease in
adaption has led to deal making in the start-up sector which valuations opened good opportunities for stake acquisitions, it
witnessed maximum consolidation in terms of deal volumes. was not viable for investors to exit. A revitalised IPO market and
increasing consolidations is expected to contribute significantly
2020 saw record PE dealmaking activity in India with to PE exits in the near term.
investments worth USD 40 billion, 28% higher than the previous
record witnessed in 2019, with around 950 deals. Strategy By the advent of the third quarter, economic activity showed
to achieve size, scalability, new product portfolios and better recovery and certain sectors and segments remained
operating models catapulted deal activity upward in the PE unaffected. Sentiments were buoyed by reports of various
04 Annual Dealtracker
governments claiming to bring vaccines by the end of this strong fundamentals besides the challenges during the year.
year. Sectors, such as telecom, healthcare, fintech, and online This is further supported by the significant PE investments this
gaming, witnessed massive traction in the early second half of year, which is perhaps the highest value of PE deals in the last
2020 due to rise in the digital economy that led to increased decade and a 28% increase over last year. It is once again a
deal activity, which also resulted in some exit deals. testament to the demonstration of the quick turnaround the
economy has witnessed during the present pandemic and this
2020 has been a record year for qualified institutional is evident from the fact that almost 50% of the total deal value
placement (QIP) funding raising, as the year recorded 26 QIP was witnessed post the Lockdown and in just last four months
issues with USD 10.3 billion issue size, the highest in terms of 2020.
of issue size since 2011. India Inc, which needed to repair
its balance sheets to cope with the fallout of the COVID-19 A resilient and focused response from economic policy makers
pandemic and the ensuing lockdown, tapped fundraising has not only led to a sharp resurgence but has also set the
avenues through rights issue and QIP offerings in the second stage for balanced growth for the country and perhaps
half of 2020. Fund raising through QIP route in 2020 was attract much more foreign investment. The pandemic has
majorly dominated by financial institutions and banks with put emphasis on businesses with strong fundamentals which
50% of issue volumes and over 63% of total issue size. is both on the top line and bottom line. 2021 will perhaps
witness a healthy balance between infrastructure that being
Interestingly, this year saw most of the IPOs opening with both brick and mortar as well as technology and at the same
a premium over the issue price suggesting strong investors’ time having a consumer focus which are around technology
appetite. Adding to the depth of the IPO market, companies or allied technology. We may witness some new terms
from diverse sectors like pharma, telecommunication, IT and gaining emphasis and demonstrating impact such as unit
financial services have made their way to the IPO space during economics, profitability, business model not just revenue model,
the period under review. The demand for these offerings we digitization, problem-solving real-world solutions, Bharat story
equally witnessed from institutional as well as retail investors. not just India story, rational valuations and smart cities. We
Most the IPO’s also witnessed over subscription indicating a look forward to a better and a healthier 2021 both in terms of
rebound in the equity market since the worst sell-off triggered world economics and India deal making.
by COVID-19 pandemic.
Prashant Mehra
In view of the scale of disruption caused by the pandemic, Partner
it is evident that the current downturn is fundamentally Grant Thornton Bharat LLP
different from recessions. The sudden shrinkage in demand
and increased unemployment is going to alter the business
landscape. Adopting new principles like ‘shift towards
localisation, cash conservation, supply chain resilience and
innovation’ will help businesses in treading a new path in
this uncertain environment. The outbreak of the COVID-19
pandemic on an unprecedented global scale has devastatingly
affected diverse sectors in India. The adverse impact is being
felt in the form of disrupted supply chains, depleted cash
flows and steep fall in revenues. As promoters of these ventures
attempt tiding over the current crisis to achieve business scale
by leveraging operational synergies, an uptick is foreseen in
M&A activity. A likely repair of the bruised economy, improving
trade relations, policy support and progress on the vaccination
front, are the key factors which would drive the sentiment
henceforth.
2020, besides being a different year and India being one of the
worst affected countries in terms of number of cases, clocked
the highest deal activity in over a decade. While this was due
to some large deals in Reliance’s Jio Platforms, it still speaks of
the confidence in the Indian economy and demonstrates the
Key highlights
1 While the unprecedented turbulence

and disruption caused by the pandemic 2 India, despite being one of the worst hit
countries by the pandemic, recorded a
in 2020 brought economic activity to sharp resurgence in deal activity in Q3,
a grinding halt globally in Q2 (Covid driven by the altered sentiment on global
Phase), a resilient and focused response supply chain dynamics favouring India
from economic policy makers across top and significant consolidation opportunity
economies ensured an equally sharp that emerged with several companies
resurgence in the subsequent quarters, exposed with weaker balance sheets.
post the unlock. Total deal values in 2020 surged 29% at
USD 77 billion over 2019 and volumes saw
marginal increase across 1,301 deals,
compared with 1,259 in the previous year.
3 M&A deals jumped 33% to USD 36.9

billion, though on sharply falling volumes, 4 While cross-border deal volumes fell by
19% compared with the previous year,
which fell from 443 to 357 deals. The deal values jumped two times over 2019.
surge in the values was largely supported Inbound deal volumes decline of 31%
by Facebook and Google’s combined was primarily due to closing of borders
USD 10.1 billion worth stake acquisition in caused by the pandemic, which was also
Reliance’s Jio Platforms. Apart from the witnessed in the Q2 2020, recording the
aforementioned two transactions, the lowest deal volumes in any given quarter
year also saw nine other deals value over since 2011. Deal values, on the other
USD one billion each largely witnessed hand, witnessed 1.2 times increase over
in the unlock phase of 2020. These top 2019, driven by five large transactions
deals accounted for over 64% of total aggregating to USD 13.7 billion, which is
M&A deal values. Despite the surge in the 76% of the total inbound deal values in
deal values, 2020 recorded only 35 deals 2020.
valued and estimated between
USD 100-999 million compared with 47
such deals in 2019.
5 Indian companies with strong balance
sheets have shaken off the shock from 6 Cross-border transactions between
India and the US dominated in both
the coronavirus pandemic to chase the inbound and outbound segments,
overseas acquisitions, coming back together totalling 31% of cross-border
strong after recording the lowest transaction aggregating to USD 15
quarterly deal volumes in Q2 2020 since billion. Followed by Japan and U.K which
2011. While the pandemic has dragged dominated the inbound and outbound
India’s overall outbound deal volume volumes, respectively.
down 8% this year, deal values recorded
an increase of 48% over last year with
Indian companies looking to pick up 8 PE investment values recorded USD 40.2
billion in 2020 marking the highest yearly
attractive assets whose valuations have values witnessed in any given year since
been hammered by the virus. 2011. This surge in the investment values
is attributed to USD 9.8 billion funding
raised by Reliance’s Jio platforms and
7 Overseas acquisition from India were USD 6.4 billion investment raised by
spread over 29 geographies/ countries, Reliance Retail Ventures during the year
of which 29 transactions aggregating followed by four other investments valued
to USD 2.4 billion were executed in the over billion dollar each. Despite the stress
US majorly in the IT sector (42% of the around COVID-19 and other geopolitical
Outbound volumes). In addition to the US, tension around the year, 2020 witnessed
20 transactions in aggregate were also 16% growth in the investment volumes
executed in the UK, Singapore, Germany, compared with 2019 attracting a
Australia and UAE by Indian companies, considerable portion of funding from
representing 26% of total outbound deal overseas investors.
values of USD 0.3 billion.
10 While the Covid phase resulted in

declined activity across various sectors,
it has encouraged digitization and other
disruptive technological megatrends—
9 The year 2020 recorded 26 fund raise via
qualified institutional placement (QIP) at
such as advanced analytics, artificial
intelligence, automation, and big data.
USD 10.4 billion, marking the highest fund This in turn saw surge in deal activity
raised via this route since 2011. This was in the start up and IT sector given
majorly driven by high value fund raise the current times. The unlock phase
by giants, such as Bharti Airtel, ICICI witnessed steady pick up in the retail
Bank, Axis Bank and Kotak Bank, among and consumer, banking, manufacturing
the top. On the other hand, 18 companies and education against the hospitality
raised USD 6.5 billion via Initial Public and leisure, travel and tourism sectors
Offering (IPO), a 2.5x increase in issue that were worst affected sectors
size over 2019. Top three IPO for 2020 during the year. Real estate sector also
were Yes Bank, SBI Cards and Payment witnessed big ticket consolidations and
Services Ltd and Gland Pharma Ltd. buyout deals on account of idle land,
delays in project completion and high
maintenance cost and debt caused
by covid. Oil and gas, logistics and
warehousing, clean and infra segments
also remained active pushing the deal
activity.
Deal snapshot
2020
Key deals to look out for in 2021
Notable deals that fell apart in 2020
Monthly deal trend
IPO and QIP activity
Key deals to look out for in 2021
CCI IBC case In a move Vertical A move into

approves to privatise integration e-commerce
BPCL industry
• Greenko Group to • Sale of Jet Airways • Oil India and • Merger of two • Tata Group’s
buy 35% stake in Engineers India’s 48% Embassy Group units, investment of about
Teesta Urja (TUL). stake acquisition NAM Estates and NAM USD 940-950 million
• Medlife merger with in BPCL from Opco with India Bulls in BigBasket for about
Pharmeasy. Government of India. Real Estate. 67% stake,and USD
• Merger of KKR owned 250 million in 1mg for
KKR India Financial a majority stake.
Services with InCred
Finance.
• Acquisition of
additional 32.67%
stake in AirAsia India
for USD 37.66 million
by Tata Sons from
JV partner AirAsia
Berhad.
Notable deals that fell apart in 2020

Terminated, as the conditions Absence of regulatory
precedent were not fulfilled within the approvals
stipulated time period
• Apis Partners-L&T Infrastructure Debt Fund (25% stake • Aurobindo Pharma-Sandoz Inc dermatology business
for USD 110 million) and generic US oral solids portfolio Udaipur (100% for
• TCG Advisory Services-Religare Finvest Ltd and USD 900 million)
Religare Housing Development Finance Corp. Ltd (86% • Tata Group, GIC and SSG Capital Management - GMR
stake for USD 46.50 million ) Airports Holding Ltd. (44.4% stake for USD 1.15 billion)
• Adani Logistics-Snowman Logistics Ltd (40% stake for • InCred Financial Services Ltd-L&T Capital Ltd - wealth
USD 41.69 million) management business (100% stake for USD 2.5 million)
• Airtel Networks Kenya Ltd (Bharti Airtel Ltd)- Telkom Kenya
Ltd (Merger)
• Muthoot Finance Ltd- IDBI Asset Management Ltd and
IDBI MF Trustee Company Ltd (100% acquisition for USD
30.3 million)
• Axis Bank to buy 19% stake in Max Life instead of 29%
Breach of agreement Impact of COVID-19
• Ebix Inc-Yatra Online Pvt Ltd (100% stake for USD 337.80 • JSW Energy Ltd-GMR Kamalanga Energy Limited (100%
million) acquisition for USD 749.4 million)
• Abu Dhabi Investment Authority, PSP Investments of • Wockhardt amends INR 1,850 crore deal with Dr. Reddy’s
Canada, and the National Investment and Infrastructure (100% stake for USD 250 million)
Fund - GVK Airport Developers Ltd and GVK Airport
Holdings Ltd (79% stake for USD 1.1 billion)
Monthly deal trend
Google LLC - Jio Platforms Ltd
M&A deal trend Facebook Inc. - Jio Platforms Ltd (USD 4.4 bn)
(USD 5.7 bn) India Grid Trust - Sterlite
Power Transmission Limited Telecom
Adani Ports and Special Telecom
Economic Zone Limited - (USD 1.7 bn)
Krishnapatnam Port Company Reliance Retail Ventures Ltd - The
Energy and Future Group- Retail and Wholesale
Ltd (USD 1.4 bn)
natural resources business and the Logistics &
ArcelorMittal India Private
Transport and logistics Ltd. - Essar Steel India Warehousing business (USD 3.3 bn)
Limited (USD 7.2 bn) Haldia Petrochemicals Ltd -
Retail and consumer
Groupe Aeroports de Lummus Technology
Paris SA - GMR Airports Manufacturing LLC (USD 1.5 bn)
Holding Ltd
Energy and RA Hospitality Holdings-
(USD 5.7 bn) Consortium of Banks -
natural resources Cayman - OYO Rooms
Infrastructure YES Bank Ltd (USD 1.4 bn)
(USD 2 mn)
management Banking and Start-up
financial services
10.0 60
9.0 8.9
9.0 48 49
45 7.9 50
8.0
39
7.0 37 37
37 34 40
Volumes
6.0 42 32
USD bn
38 31 32 29
25
5.0 28 35 4.3 34 30
4.0 32
3.7 3.6 28 3.4 30
4.0
17 25
2.7 20
3.0
2.0 1.9 17 1.8
2.0 1.5 1.5 1.5
1.2 1.3 1.1 0.9 10
0.7 0.9 0.8
1.0 0.4
0.1
- -
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2019 values USD bn 2020 values USD bn 2019 volumes 2020 vol umes
PE deal trend
Brookfield Asset Management, Brookfield - RMZ Corp
Public Investment Fund, Saudi British Columbia Investment
Arabia- Jio Platform Ltd Mubadala - Jio Platforms Ltd (USD 2.0 bn)
Management Corp and GIC-
(USD 1.5bn) (USD 1.2 bn) Reliance Jio lnfratel Real estate
Telecom Telecom (USD 3.7 bn) Blackstone- Prestige Group
(USD 1.2bn)
Telecom
KKR - Jio Platforms Ltd Templar Investments- Real estate
(USD 1.5 bn) Jindal Steel and Power Public Investment Fund
Limited(USD 1 bn) -Reliance Retail Ventures
Telecom
(USD 1.3bn)
Manufacturing
Brookfield-InvIT - Pipeline Vista Equity Partners - Real estate
Infrastructure Private Limited Jio Platforms Ltd Silver Lake- Reliance
(USD 1.8 bn) (USD 1.5 bn) Retail Ventures Blackstone- Piramal Glass
(USD 1 bn) Private Limited (USD 1bn)
Energy and natural resources Telecom
Manufacturing
7.0
Retail and consumer 120
6.6
106
6.0 5.8
5.6 5.6 5.5 93 100
81 83 84 82
5.0 76
75 78 73 3.9 4.2 80
65 65 4.0
4.0 77 71 76
73 71 73 3.4
USD bn
Volumes
68 3.1 68 60
56 60
3.0 2.7
56 2.4 2.2 2.4
2.1 48 2.0 1.9 40
2.0 1.7 1.4
1.3 1.1 1.1
0.9 20
1.0 0.6
0.0 -
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2019 values USD bn 2020 values USD bn 2019 volumes 2020 vol umes
IPO and QIP activity
IPO snapshot
2020 witnessed 6% increase in the IPO volumes with 1.6X rise in the issue size compared with 2019.
The year began with two IPOs in the first quarter with issue size solution providers, broking firms and even biotechnology
USD 1.6 billion and saw muted activity in Q2 2020 owing to the companies came out with IPOs post the lockdown phase.
disruption caused by COVID-19. However, with the unlocking, The demand for these offerings were witnessed equally from
the markets turned positive and Q3 saw 10 IPOs raising USD institutional as well as retail investors as most of the IPO’s
3.4 billion. Continuing the positive sentiment, Q4 reported six witnessed over subscription indicating a rebound in the equity
IPOs with issue size USD 1.5 billion. Companies ranging from market since the worst sell-off triggered by the COVID-19
waste managing services, to asset management, technology pandemic.
Top IPO
ICICI Prudential Life General Insurance Bandhan Bank Limited Embassy Office YES Bank Ltd
issues
Insurance Company Corporation of India (USD 0.7 bn) Parks Pvt Ltd FPO
Ltd (USD 0.9 bn) (USD 1.7 bn) (USD 0.7 bn) (USD 2 bn)
Banking and
Banking and Banking and financial services Real estate Banking and
financial services financial financial services
10.0 services 9.3 30
9.0 27
25
8.0
7.0
20
19
USD bn
6.0
Volumes
4.8 16
5.0 15 15
3.8
4.0
10 2.9 10 10
3.0 9
8
2.0 1.4 1.5 1.6
1.1 1.1 6 1.0 5
1.0
2
0.0 0
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 H2 2020
Values USD bn Volumes

Sector trend - 2020
By values By volumes
2% 5%
2%
4%
10% 33% 34%
13%
USD 6.5 bn 64% 18 IPOs
11% 11%
11%
Banking and financial services Pharma, healthcare and biotech Real estate Telecom
Infrastructure management Hospitality and leisure Manufacturing Others
QIP snapshot
2020 has been a record year for QIP funding raising as the year recorded 26 QIP issues with USD 10.3 billion issue size, the
highest in terms of issue size since 2011.
QIP activity came strong after the lockdown in Q2 2020, raising to raise funds as compared with other sectors with 50% of
10 issues in the third quarter of 2020 valued at USD 4.8 billion, QIP issues in 2020. To further encourage and help companies
the highest raised in any given quarter since 2011. Even as the to raise funds amid disruptions caused by the COVID-19
impact of the COVID-19 pandemic was witnessed affecting pandemic, markets regulator Securities and Exchange Board of
majority of the sectors, Indian financial services businesses India (SEBI) has also relaxed the norms for QIP.
were witnessed to be more proactive in tapping the markets
Top QIP
Motherson Sumi Kotak Mahindra Bank Idea Cellular ltd Axis Bank Limited Bharti Airtel
issues
Systems Ltd Ltd (USD 0.5 bn) (USD 1.8 bn) Limited
(USD 0.3 bn) (USD 0.9 bn) (USD 2 bn)
Automotive Banking and Telecom Real estate Telecom
financial services
7.0 28
30
6.1
6.0 25 25
5.0 4.5 4.4 4.2 20
USD bn
4.0 18
15
3.0 12 2.6
11 2.0 10
2.0 8
8
1.0 0.6 0.6 0.7 5
4
0.1 3 4
0.0 0
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 H2 2020
Issue Size USD bn Volumes
Sector trend - 2020

By values By volumes
2% 3%
3%
19%
3%
6%
8%
50%
20%
USD 10.3bn 26 issues
63%
8%
15%
Banking and financial services Telecom Retail and consumer Agriculture and forestry
Manufacturing E-commerce Real estate Others
Year-on-year
performance
M&A deal trend
PE deal trend
M&A deal trend
summary
571 deals 511 deals 413 deals 478 deals 443 deals 358 deals
Deal
USD 27.8 bn USD 42.6 bn USD 40.4 bn USD 89.4 bn USD 27.6 bn USD 37.5 bn
Top deals
Vedanta Ltd- Rosneft PJSC, Idea-Vodafone Walmart- ArcelorMittal- Facebook-Jio

Cairn India Trafigura and (USD 23 bn) Flipkart Essar Steel Platforms
Ltd (USD 2.3 United Capital (USD 16 bn) (USD 7.2 bn) (USD 5.7 bn)
bn) Partners-Essar
Oil (USD 12.9 bn)
59 47 42 63 48 46
70 64.8 350
295
276
60 258 253 300
237 241 231
216 212
Volumes
50 250
USD bn
197 195
40 200
30.9
27.4
30 24.6 150
18.2 94 19.1
20 14.1 13.6 15.2 69 100
9.5 9.4 9.1 9.2
10 50
0 -
H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 Q1 Q2 H2
2016 2017 2018 2019 2020
Deals estimated and valued over USD 100 mn Va l ues USD bn Vol umes
Pre-Covid Covid Unlock
Energy and Energy and Telecom Telecom Manufacturing Telecom

value
natural natural (62%) (22%) (29%) (29%)

Top sector by
resources resources
(16%) (41%)
volume
Start-up Start-up Start-up Start-up IT & ITeS Start-up

(23%) (28%) (22%) (24%) (18%) (20%)
PE deal trend
summary
1,046 deals 972 deals 736 deals 795 deals 815 deals 943 deals
Deal
USD 16.2 bn USD 13.9 bn USD 20.5 bn USD 20.7 bn USD 31.4 bn USD 40.2 bn
Baillie Gifford, Brookfield- SoftBank - ADIA and TPG Brookfield- Brookfield- RMZ
Top deals
Greenoaks Capital, Reliance Infratel

Steadview Capital, Flipkart Capital-UPL Ltd Reliance Jio Corp- real estate
T Rowe Price As- (USD 1.6 bn) (USD2.5 bn) (USD 1.2 bn) lnfratel (USD assets (USD 2 bn)
sociates, QIA, DST 3.7 bn)
Global, GIC, Iconiq
Capital, and Tiger
Global-Flipkart
(USD 0.7 bn)
35 27 32 43 63 70
25.0 22.7 700
583 600
20.0 499 17.8
463 473
506 500
414 383
407
15.0 322 388 13.6 432
12.0 12.3 400
Volumes
USD bn
10.9
9.2 9.8
8.5 221 300
10.0 8.0
7.0 216
5.9 200
5.2
5.0
100
0.0 -
H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 Q1 Q2 H2
2016 2017 2018 2019 2020
Start-up Start-up Ecommerce Start-up Start-up Telecom

value
(31%) (17%) (29%) (23%) (17%) (24%)

Top sector by
volume
Start-up Start-up Start-up Start-up Start-up Start-up

(65%) (69%) (61%) (61%) (61%) (64%)
Mergers and
acquisitions
dealscape
M&A sector focus
Domestic, merger and internal restructuring
Sector movement compared with 2019
Domestic deal activity - Cities in focus
Inbound deal trend
Outbound deal trend
Cross-border deals: Geographic track
Corridors
Top M&A deals - 2020
Notable M&A deals - 2020
Expert speak
M&A sector focus
The year witnessed maximum consolidation in the start-up sector value to USD 10.8 billion, a 29% of M&A deal values
sector, with 20% of M&A deal volumes, followed by the IT sector. in 2020. Buoyed by surge in new orders and production,
This uptick in the tech sectors was due to adoption of new age the manufacturing sector recorded 29 deals. The year also
business models in conventional sectors to adapt to the new witnessed Embassy Office Parks REIT acquisition of Embassy
normal of social distancing and travel restrictions. Amid this, a TechVillage’s (ETV) assets for USD 1.3 billion in the single-
halt was witnessed in aviation, hospitality, travel and tourism largest property commercial deal of the country. This will make
sectors, which are largely dependent of physical movement of Embassy REIT the largest office space in Asia.
people resulting in disproportionately being impacted. Byju’s’
acquisition of WhiteHat Jr in a USD 300 million deal was one The year witnessed billion dollar deals across sectors with the
of the most significant deal of the year and it demonstrated rationale to; the telecom sector (to pare debt), infra sector
the upward trajectory of the ed-tech sector. In healthcare (to pare debt), transport and logistics sector (to increase the
perspective, teleconsultation has started gaining popularity; market share), banking and financial services sector (as part of
Amazon’s launch of online pharmacy and Reliance’s acquisition the RBI rescue plan), energy and natural resources sector
of Netmeds showcase the potential that the sector has to offer. (as part of one of the government’s largest asset-sale exercises),
retail and consumer sector (to expand brick-and-mortar retail
Foreign tech giants, such as Google and Facebook, have empire).
acquired stakes in Jio platforms, pushing the telecom
Pharma, healthcare
Start-up IT and ITeS and biotech
113 78 71 67 81 60 35 46 32
788 2,584 1,097 5,619 1,663 2,300 1,627 2,566 1,089
Energy and natural Banking and Retail and

resources financial services consumer Automotive Manufacturing
19 18 15 33 30 20 25 30 22 7 13 24 43 37 29
12,249 4,539 5,160 2,748 1,692 1,701 5,306 1,399 4,223 260 500 647 16,045 8,110 2,186
Media and Professional/ Infrastructure

entertainment Education E-commerce business services management
29 21 15 14 13 13 24 20 11 19 12 11 8 7 8
1,605 240 80 273 383 86 16,887 817 1,447 106 86 186 635 1,451 2,137
Aerospace and Agriculture and Transport and

defence sector forestry Real estate logistics Telecom
3 2 1 13 5 4 6 5 5 3 9 8 7 3 8
403 3 8 4,353 324 653 541 305 1,569 133 381 2,032 19,275 35 10,819
Top sectors based on deal volumes

Hospitality and leisure
10 12 1 Volume 2018 2019 2020
576 551 41 Values USD mn 2018 2019 2020
Domestic, merger and
internal restructuring
2020 witnessed the lowest deals recorded in a quarter i.e. increase its retail market in India against Amazon’s foothold.
during the COVID-19 phase at 42 deals and ended the year Adani’s acquisition of Krishnapatnam Port for USD 1.4 billion,
with 61 deals in Q4 2020. Compared with 2019, 2020 recorded marks the single-biggest acquisition by the company, that will
19% decline in deal volumes, with only 7% decrease in the deal help its market share increase from 22% to 27%.
values, demonstrating an increase in the average deal size. The
average deal size increased from USD 67 million in 2019 to USD While COVID-19 practically disrupted all businesses,
76 million in 2020. corporates were left either quitting or pressing ahead with the
ongoing deals. Decisions were largely made based on liquidity
The year witnessed some marquee transactions such as position, valuation trends, regulatory changes and other
Reliance’s acquisition of Future Group, for USD 3.3 billion, to practical aspects relating to lockdowns and border closures.
summary
323 deals 251 deals 285 deals 266 deals 216 deals
Deal
USD 15.6 bn USD 32.3 bn USD 51.7 bn USD 17.7 bn USD 16.4 bn
Top deals
UltraTech Ce- Idea-Vodafone Bharti Infratel- ArcelorMittal- Reliance Retail-

ment-Jaiprakash (USD 23 bn) Indus Towers Essar Steel Future Group
Associates (USD 14.6 bn) (USD 7.2 bn) (USD 3.3 bn)
(USD 2.4 bn)
Domestic, merger and internal restructuring
19 18 30 24 25
45.0 161 162 41.2 180

40.0 138 141 144 137 160
113 129
35.0 119 140
30.0 26.7 120 Volumes
USD bn
25.0 100
20.0 80
55
13.1
15.0 10.5 42 60
8.2 7.4 8.4
10.0 5.5 5.3 40
4.6
5.0 2.7 20
0.0 -
H1 H2 H1 H2 H1 H2 H1 H2 Q1 Q2 H2
2016 2017 2018 2019 2020
Manufacturing Telecom Telecom Manufacturing Retail and consumer

value
(37%) (74%) (36%) (43%) (24%)

Top sector by
volume
Start-up Start-up Start-up Start-up Start-up

(40%) (31%) (33%) (24%) (29%)
Sector movement compared
with 2019
2020 witnessed an overall decline in the deal activity volumes. in oil & gas sector) as auto and industrial manufacturing
However, energy, infra, real estate and education sectors declined, and goods and passenger movement (both bulk and
witnessed marginal increase in deal volumes. On the other personal) fell. However, most essential services and sectors have
hand, start-up, banking, retail and logistics sector saw high continued to run during the pandemic helping retail, agri, tech,
value deals in aggregate compared with 2019. banking sectors retain some momentum.
The complete lockdown across the country slowed down the

demand of transport fuels (accounting for two-third demand
Volumes
Start-up Pharma, healthcare Banking and IT & ITeS Manufacturing Retail and
and biotech financial services consumer
64 20 20 36 22 16
63 18 17 17 17 14
E-commerce Media and Automotive Professional/ Transport and Aerospace and

entertainment Business services logistics defence
14 12 08 07 07 02
09 09 07 06 04 01
Agriculture Hospitality and Telecom Education Energy and Infrastructure

and forestry leisure natural resources management
02 08 03 11 08 04
01 01 01 12 10 05
Real estate
02
04
2019 2020
The data only pertains to domestic deals and excludes mergers and internal restructuring deals.
Value (USD mn)
Pharma, healthcare IT & ITeS Manufacturing E-commerce Media and Automotive

and biotech entertainment
1,661 890 7,568 254 89 426
648 172 1,837 242 35 162
Professional/ Hospitality and Energy and Infrastructure Start-up Banking and

Business services leisure natural resources management financial services
39 124 3,026 1,390 328 703
30 41 2,096 237 1,069 1,561
Retail and Transport and Aerospace and Agriculture Telecom Education

consumer logistics defence and forestry
722 198 03 70 35 63
4,003 1,786 08 280 595 81
Real estate
143
1,557
2019 2020
Domestic deal activity -
Cities in focus
Mumbai, Bengaluru and NCR region remained active in 2020, recording 77% of the domestic transactions and remained the
largest recipient of funds with deal values amounting to USD 11 billion, a 67% of total domestic deal values during the year. While
these cities mainly focused their consolidations in the start-up sector, tier 2 cities, such as Ahmedabad, Kolkata, Chandigarh and
Odisha, witnessed consolidations in the pharma, manufacturing, retail and banking sectors.
Chandigarh
Gurgaon
Values: 62 | Volume: 2
Values: 1,049 | Volume: 17
Top sector: Manufacturing/
Top sector: Start-up
Start-up
Delhi
Values: 718 | Volume: 29 Noida
Top sector: Start-up Values: 37 | Volume: 8
Top sector: Media and
entertainment
Ahmedabad
Top sector: Pharma, healthcare
and biotech
Surat
Top sector: Pharma, healthcare
and biotech Kolkata
Top sector: Manufacturing
Mumbai
Values: 7,102 | Volume: 52 Odhisa
Top sector: Banking and financial
services/ Energy and natural resources
Goa
Top sector: Retail and Hyderabad
consumer/Transport and Values: 369 | Volume: 6
logistics Top sector: Education
Pune Bengaluru
Values: 21 | Volume: 5 Values: 2,044 | Volume: 50
Top sector: Start-up Top sector: Start-up
Chennai
Values in USD mn
Top cities based on target destinations
Inbound deal trend
Inbound deal volumes decline of 31% was primarily due to large transactions aggregating to USD 13.7 billion, which
closing of borders caused by the pandemic, which was also is 76% of the total inbound deal values in 2020. Caught by
witnessed in the Q2 2020, recording the lowest deal volumes the disruptions of the pandemic, Indian businesses have
in any given quarter since 2011. Deal values, on the other become vulnerable thus enabling overseas companies to make
hand, witnessed 1.2 times increase over 2019, driven by five acquisitions at attractive valuations.

summary
Deal
USD 20.7 bn USD 6 bn USD 25.7 bn USD 7.9 bn USD 18.1 bn
Rosneft PJSC, RA Hospitality Facebook Inc-Jio

Top deals
Tencent-Flipkart Walmart-Flipkart
Trafigura and ($0.7 bn) ($16 bn) Holdings-Cay- Platforms ($5.7 bn)
United Capital man-OyoRooms
Partners-Essar ($2 bn)
Oil ($12.9 bn)
Inbound deal trend
17 19 23 19 17
25.0 60
21.4 51 50 49
46 46 50
20.0 43 44
42
16.8 36 40
15.0
Volumes
USD bn
30
10.0 19 8.3
6.3 20
11
3.9 4.3 4.4
5.0 3.4 3.5 3.4
2.6 10
0.0 -
H1 H2 H1 H2 H1 H2 H1 H2 Q1 Q2 H2
2016 2017 2018 2019 2020
Deals estimated and valued over USD 100mn Va l ues USD bn Vol umes
Energy & E-commerce E-commerce Start-up Telecom

value
Natural (29%) (65%) (29%) (56%)

Top sector by
Resources
(65%)
volume
Start-up IT & ITES IT & ITES IT & ITES IT & ITES

(18%) (17%) (20%) (18%) (17%)
with 2019
Core sectors, such as auto, infra, manufacturing, telecom and international players looking to expand their footprint in
transport and logistics, witnessed an uptick in deal activity India. Sectors, including education, hospitality, media and
compared with 2019, recording high value deals of over USD entertainment, real estate and professional services, remained
100 million. Sectors, such as IT, energy and e-commerce, muted during the year.
which present tremendous potential witnessed interest from
Volumes
Banking and E-commerce Education Energy and Hospitality and IT & ITeS
financial services natural resources leisure
09 06 01 08 01 17
03 02 - 02 - 11
Media and Pharma, healthcare Professional/ Real estate Start-up Agriculture

entertainment and biotech Business services and forestry
05 07 02 03 14 02
01 05 01 01 08 02
Retail and Automotive Infrastructure Manufacturing Telecom Transport and

consumer management logistics
06 01 02 09 - 02
06 04 03 10 03 04
Value (USD mn)

Banking and Education Hospitality and Manufacturing Media and Pharma, healthcare
financial services leisure entertainment and biotech
977 200 05 444 25 733
140 - - 316 05 315
Professional/ Real estate Retail and Start-up Agriculture Automotive

Business services consumer and forestry
10 163 538 2,256 240 35
05 12 200 29 368 421
E-commerce Energy and Infrastructure IT & ITeS Telecom Transport and

natural resources management logistics
563 1,309 37 185 - 183
1,205 1,510 1,900 1,221 10,184 245
2019 2020
Outbound deal trend
Indian companies with strong balance sheets have shaken off attractive assets whose valuations have been hammered
the shock from the coronavirus pandemic to chase overseas by the virus.
acquisitions, coming back strong after recording the lowest
quarterly deal volumes in Q2 2020 since 2011. While the The IT sector remained hotspot for overseas acquisitions as
pandemic has dragged India’s overall outbound deal volume Indian firms look to build capabilities in weak areas, resulting in
down 8% this year, deal values recorded an increase of deals in digital, cloud and SaaS (software as a service) space
48% over last year with Indian companies looking to pick up seeing healthy activity.
summary

Deal
USD 6.3 bn USD 2.2 bn USD 12 bn USD 2 bn USD 3 bn
Indian Oil Corp, Fortis Healthcare- UPL Ltd- Arysta OyoRooms- Haldia Petrochemicals-
Top deals
Oil India Ltd and RHT Health Trust Lifescience Leisure Group Lummus Technology
a unit of Bharat (USD 0.7 bn) (USD 4.2 bn) (USD 0.4 bn) (USD 1.5 bn)
Petroleum Corp.
Ltd-Tass-Yuryakh
oilfield (USD 1.3
bn) Outbound deal trend
12.0 54 11 5 10 5 4 60
10.0 45 45 9.7 47 45 50
40 40
36 37
8.0 40
Volumes
USD bn
6.0 30
20
4.0 3.2 16 20
3.1
2.2 2.4
1.4 1.6 2
2.0 10
0.8
0.4 0.4
0.0 -
H1 H2 H1 H2 H1 H2 H1 H2 Q1 Q2 H2
2016 2017 2018 2019 2020
Energy & Pharma, Agriculture IT & ITeS Energy & Natural Resources
value
Top sector by
Natural Healthcare & & Forestry (30%) (53%)

Resources Biotech (35%)
(35%) (64%)
volume
Pharma, IT & ITeS IT & ITeS IT & ITeS IT & ITeS

Healthcare & (33%) (35%) (35%) (42%)
Biotech (25%)
with 2019
In 2020, the auto, energy, telecom, IT and professional services sectors saw increased deal activity, both in terms of deal volumes
and values. Infra, banking and hospitality sectors, however, saw muted deal activity compared with 2019. The technology
sector has been the most acquisitive. Companies, such as Infosys, HCL Technologies, Wipro and Tech Mahindra, have made
overseas acquisitions.
Volumes
Banking and Hospitality and Infrastructure Manufacturing Pharma, healthcare Retail and
financial services leisure management and biotech consumer
01 03 01 06 19 08
- - - 02 09 02
Agriculture Education Automotive Energy and IT & ITeS Media and

and forestry natural resources entertainment
01 01 04 02 29 04
01 01 13 03 32 05
Professional/ Telecom
Business services
03 -
04 04
Value ($ mn)
Agriculture Banking and Education Hospitality and Infrastructure Manufacturing
and forestry financial services leisure management
13 11 120 422 24 98
05 - 05 - - 32
Media and Pharma, healthcare Retail and Automotive Energy and IT & ITeS
entertainment and biotech consumer natural resources
126 172 139 38 205 590
40 126 19 64 1,554 907
Professional/ Telecom
Business services
36 -
151 40
2019 2020
Cross-border deals:
Geographic track
UK
Values Volume
While cross-border deal volumes fell 85 7
by 19%, compared with the previous 1,187 7
Belgium Denmark
year, deal values exceeded twice the Values Volume Values Volume
2019 values driven by Facebook and 79 1 5 1
Google’s combined USD 10.1 billion 25 2 18 1
worth stake acquisition in Reliance’s Jio
Platforms and Haldia Petrochemical’s Canada
stake acquisition of Lummus Technology Values Volume
for USD 1.5 billion. The year in total 9 2
recorded six deals in the billion-dollar
category and 15 deals estimated and
valued over USD 100 million as against Switzerland
Values Volume Ireland
one and 23 deals recorded in 2019,
5 1 Values Volume
respectively. 5 1
27 1
5 1
Cross-border transactions between
India and the USA dominated in both
the inbound and outbound segments,
together totalling 31% of cross-border Spain
transaction, aggregating to USD 15 Values Volume
billion, followed by Japan and the 6 1
UK that dominated the inbound and
outbound volumes, respectively.
France
Overseas acquisition from India were Values Volume
USA 5 1
spread over 29 geographies/countries,
Values Volume 1,906 5
of which 29 transactions aggregating
to USD 2.4 billion were executed in the 2,361 29
12,671 15
USA, majorly in the IT sector (42% of
outbound volumes). In addition to the
US, 20 transactions in aggregate were
also executed in the UK, Singapore,
Germany, Australia and the UAE by
Indian companies, representing 26% of
the total outbound deal values of USD
0.3 billion.
Brazil
Values Volume
22 1
Netherlands Germany
Values Volume Values Volume
6 2 11 2
12 1 230 3
Norway
Values Volume
181 1
Sweden
Values Volume
75 2
Prague
Values Volume
36 1
Turkey
Values Volume
17 1
Italy UAE
Values Volume Values Volume Japan
6 2 36 3 Values Volume
e 396 10
5 1
China
Values Volume
408 6
Kenya
Values Volume Singapore
14 1 Values Volume
28 4
894 4
South Africa
Values Volume Australia
10 3 Values Volume
New Zealand
106 1 137 3
Values Volume
6 2
34 2
Values in USD mn
Outbound
Inbound
Corridors
India-Americas
Inbound Outbound
Year Volumes Values Year Volumes Values
USD mn USD mn
2016 29 1,580 2016 38 1,799
2017 31 2,696 2017 29 631
2018 44 18,913 2018 45 10,266
2019 32 1,571 2019 31 688
2020 16 12,716 2020 32 2,393
Top sector attraction by volume - 2020

IT & ITeS Telecom Start-up E-commerce Pharma, health- Real estate Transport
care and biotech and logistics
44% 19% 13% 6% 6% 6% 6%

Inbound
IT & ITeS Pharma, Media and Agriculture Automotive Energy and Professional/ Telecom
healthcare entertainment and forestry natural Business
and biotech resources services
56% 19% 9% 3% 3% 3% 3% 3%
Outbound
Americas includes both North and South America.
Top deals Inbound Acquirer Target Value
Outbound Acquirer Target Value
Facebook Inc.
Telecom Jio Platforms Ltd USD 5,700 mn
Google LLC
Telecom Jio Platforms Ltd USD 4,439 mn
Energy and Haldia Petrochemicals Ltd

natural Lummus Technology LLC USD 1,544 mn
resources
Walmart Inc
E-commerce Flipkart Online Services Pvt Ltd USD 1,200 mn
Clarivate Analytics Plc

IT & ITeS Piramal Enterprise Ltd- Decision Resources Group USD 950 mn
Expert speak
The India-USA corridor remained vibrant in 2020, with M&A between the USA
and India touching USD 15 billion in 2020, comprising USD 13 billion of inbound
investment. Deal value increased significantly from USD 2.5 billion in the previous
year, primarily driven by interest in India tech stack, through two large ticket
investments from Facebook and Google in Jio Platforms Ltd. Similarly, as per
industry source, the interest from US financial investors (PE&VC) also remained
secular in 2020, with investments doubling from last year and touching USD 12.3
billion during the January-September period.
As we investigate the future post pandemic, India is beginning to be recognised as

a strong contender for sourcing by global supply chains, as the USA companies
implement their China plus One strategy. This change in global positioning,
combined with India’s accommodative foreign investment policies, improvement
in ease of doing business and a new US administration, which is likely to reduce
policy uncertainty and reinvigorate trade talks, are all expected to further
strengthen the USA-India business and deal outlook.
Siddhartha Nigam
National Managing Partner
Growth and Clients & Markets
Grant Thornton Advisory Private Limited
Corridors
India-UK
Inbound Outbound
USD mn USD mn
2016 4 214 2016 13 1,252
2017 6 423 2017 5 34
2018 2 10 2018 4 177
2019 3 2,010 2019 9 337
2020 7 1,187 2020 7 85

Manufacturing Banking and Energy and natural IT and ITeS Pharma, health- Start-up
financial services resources care and biotech
30% 14% 14% 14% 14% 14%

Inbound
IT and ITeS Automotive Education Manufacturing

43% 29% 14% 14%
Outbound
Top deals Inbound Acquirer Target Value
BP plc
Energy and
natural resources Reliance BP Mobility ltd USD 1,000 mn
Pharma, ZNZ Pharma 2 Ltd

healthcare and Celon Laboratories Private Limited USD 75 mn
biotech
GFG Alliance- Liberty House

Manufacturing Adhunik Metaliks Ltd and associate Zion Steel Ltd USD 60 mn
Liberty House Group

Manufacturing SBQ Steels Limited USD 37 mn
GMM Pfaudler Limited and Mavag AG

Manufacturing Pfaudler Group USD 27 mn
Expert speak
The UK’s Office for Budget Responsibility has warned that the UK economy could
shrink by 35% in the second quarter of 2020. The International Monetary Fund
forecasted economic contraction of 10.3% for India in 2020, followed by growth
of 8.8% in 2021. To any M&A player, chaos represents an opportunity. Bereft of
any big-bang transactions, India-UK deals in 2020 were either driven by marquee
names, such as Tata Motors, Reliance and BP, or were selective leaps, such as TVS
buying Norton in administration.
The COVID-19 pandemic has diverted attention from the UK’s ambition to negotiate
a trade deal with India. Nevertheless, a deal is still very much a priority for the UK
post-Brexit and this, I believe, will lead to higher deal activity in this corridor.
Ashish Chhawchharia
Partner
GT Restructuring Services LLP
Corridors
Deals between India and Europe
Inbound Outbound
USD mn USD mn
2016 17 424 2016 18 414
2017 16 491 2017 12 444
2018 16 3,612 2018 21 634
2019 19 1,395 2019 20 775
2020 19 2,487 2020 17 174

Transport Agriculture Banking Energy and Pharma,
Manufacturing IT and ITeS Infrastructure Retail and and and and financial natural healthcare Start-up
management consumer logistics forestry services resources and biotech
26% 16% 11% 11% 11% 5% 5% 5% 5% 5%
Inbound
Automotive IT and ITeS Energy and Manufacturing Media and Professional/ Telecom
natural entertainment business
resources services
47% 23% 6% 6% 6% 6% 6%
Outbound
The data in the tables include all European countries except the UK.
Deals between India and Germany
Inbound Outbound
USD mn USD mn
2016 4 39 2016 2 29
2017 1 5 2017 1 9
2018 5 89 2018 7 158
2019 2 177 2019 6 87
2020 3 230 2020 3 11
Top deals - India and Europe Inbound Acquirer Target Value
Groupe Aeroports de Paris SA (ADP)

Infrastructure
management GMR Airports Holding Ltd USD 1,369 mn
Energy and Total S.A.

natural Adani Green Energy Ltd USD 510 mn
resources
Oldendorff Carriers GmbH & Co.

Transport and Tata Power Company Ltd- Trust Energy
logistics Resources Pte Ltd sells three ships USD 213 mn
Orkla ASA - MTR Foods Pvt Ltd

Retail and
consumer Eastern Condiments Pvt Ltd USD 37 mn
Professional/ Wipro Ltd

Business 4C USD 79 mn
services
Expert speak
Germany has persistently been a strong ally to the Indian economy as the sixth most
important trading partner of India in the European Union. With the COVID-19 pandemic
impacting economies across the globe, the real GDP in Germany is expected to decline
by 5.8% in 2020 and rebound by 4.4% in 2020-21. Germany business confidence index
too has been hindered along with ongoing trade conflicts between the USA, China and
Europe whereas India’s economy contracted by 7.5% y-o-y in the September quarter,
pushing the country into a recession. Surprisingly, the Indian manufacturing sector
staged a turnaround but there are concerns about whether it is sustainable in the wake
of weak demand and investment.
Nevertheless, both India and Germany have the potential to generate substantial
bilateral trade from lucrative investment affiliations. Germany is home to more than 213
Indian subsidiaries, of which about 74 Indian companies, each with an annual turnover
of more than EUR 10 million, generate combined annual revenues of approximately
EUR 11 billion; with an overall increase in the number of Indian companies investing in
Germany.
In January 2020, a strategic stake acquired in Germany’s electric bike maker, HNF-
Nicolai marked a major step for Hero Cycles, India’s largest bicycle producer, aiming to
be at the centre stage of the European bicycle market. Further, the auto components
maker Endurance Technologies Ltd. had fully acquired Italian auto-parts manufacturer
Grimeca Srl in May 2020. In July, we witnessed Precision Camshafts Limited (PRECAM),
an auto component manufacturer from Solapur, Pune, having completed acquisition of
its foreign subsidiaries with acquired stakes in the Dutch electric mobility firm, EMOSS
Mobile Systems BV and MFT Motoren und Fahrzeugtechnik GmbH, Germany thereby
allowing to expand its manufacturing base in the European Market. The acquisition
of EMOSS has firmed the stand of PRECAM into the electric motor vehicles. Above
all, Mahindra & Mahindra Ltd., in September 2020, raised its shareholding in Finland-
based Sampo Rosenlew Oy to 74.97% to provide Sampo with growth opportunities in
newer export markets, also enabling to leverage Mahindra’s strength in manufacturing,
sourcing and distribution.
Hence, with leading multinationals today setting up their R&D centres in India, there
is a need for a broader and deeper cooperation between India and Germany in
technology and R&D. We observe that the German economy is slowly recovering
and the government’s economic stimulus package worth a total of EUR 130 billion is
expected to play a significant role in this development. Moreover, the financial aid and
measures have contributed greatly to improving consumer confidence since June
2020. Going forward, with the Indian government also rapidly simplifying procedures,
instituting market reforms and implementing fair, effective, and transparent processes
to attract foreign investments and cooperation; the investment from Germany would
place focused, integrated efforts and initiatives for both. Industries, such as industrial
automation and robotics, automotive and pharmaceuticals, are likely to provide good
opportunities for German companies in India.
Saket Mehra
Partner
Grant Thornton Bharat LLP
Note: The data in the tables include all European countries except the UK.
Top M&A deals - 2020
M&A deals jumped 36% to USD 37.5 billion, though on sharply falling volumes, which fell from 443 to 358 deals compared with
2019. The surge in the values was largely supported by 11 deals valued at over USD 1 billion each largely witnessed in the unlock
phase of 2020. These top 11 deals accounted for over 63% of the total M&A deal value. Despite the surge in the deal values, 2020
recorded only 35 deals valued and estimated between USD 100-999 million, compared with 47 such deals in 2019.
Acquirer Target Sector USD bn Deal type %

stake
Facebook Inc. Jio Platforms Ltd Telecom 5,700 Minority 10% Facebook said the deal is its
stake largest single investment in
another company aside from
its acquisitions. It marked the
Google LLC Jio Platforms Ltd Telecom 4,439 Minority 8% company’s “commitment to India”
stake and meant it was now the largest
minority shareholder in the Indian
Reliance Retail The Future Retail and 3,295 Acquisi- 100% telecom group.
Ventures Ltd Group- Retail and consumer tion
Wholesale business The deal will expand Reliance’s
and the Logistics brick-and-mortar retail empire.
& Warehousing The company already runs about
business 12,000 stores and will add over
1,800 Future Retail stores to its
Haldia Lummus Technology Energy and 1,544 Con- 57% network and bolster e-commerce
Petrochemicals Ltd LLC natural trolling to take on the competition from
resources stake Amazon.
Adani Ports and Krishnapatnam Port Transport 1,434 Majority 75% This deal marks the single-biggest
Special Economic Company Ltd and logistics stake acquisition by Adani Ports and
Zone L imited will help increase its market share
from 22% to 27%.
SBI, HDFC, ICICI YES Bank Ltd Banking and 1,389 Majority N.A.
Bank, Axis Bank financial stake
Limited, Kotak services
Mahindra Bank,
The Federal Bank,
Bandhan Bank,
IDFC First Bank
Groupe Aeroports GMR Airports Holding Infrastruc- 1,369 Strategic 49%

de Paris SA (ADP) Ltd ture manage- stake
ment
This deal will make Embassy REIT

Embassy Office Embassy Group- Real estate 1,322 Acquisi- 100%
the largest in Asia in terms of
Parks REIT Embassy TechVillage tion
office space
Walmart Inc Flipkart Online E-commerce 1,200 Minority N.A.

Services Pvt Ltd stake
NTPC Ltd THDC India Limited Energy and 1,014 Majority 74%
natural stake
resources
Notable M&A deals - 2020
Retail and
consumer
Reliance inks Rationale: Reliance Industries Ltd acquires Kishore Biyani-led Future Group’s retail, wholesale, logistics and
USD 3.3 billion warehousing businesses for a total of USD 3.3 billion, including debt.
deal to buy
Future Group’s Future Group said in a separate statement that it will first merge five of its publicly listed units into Future
retail, wholesale, Enterprises Ltd. These units are Future Retail Ltd, Future Lifestyle Fashions Ltd, Future Consumer Ltd, Future
logistics and Supply Chains Solutions Ltd and Future Market Networks Ltd.
warehousing
Subsequently, Mumbai-listed Future Enterprises will sell the retail and wholesale business to Reliance Retail
businesses.
and Fashion Lifestyle Ltd, a wholly owned subsidiary of Reliance Retail Ventures Ltd. These businesses
include key formats such as Big Bazaar, fbb, Foodhall, Easyday, Nilgiris, Central and Brand Factory. It will
also sell logistics and warehouse business.
The deal will expand Reliance’s brick-and-mortar retail empire. The company already runs about 12,000
stores in over 6,700 cities and will add over 1,800 Future Retail stores to its network.
Amazon filed a suit to put on hold the deal between Future Group and Reliance Industries. Amazon has
also written to the SEBI and stock exchanges that while reviewing the proposed transaction, urging them to
also take into consideration the Singapore arbitrator’s interim judgement. However, in November 2020, the
Competition Commission of India (CCI) approved the proposed deal. In August 2019, Amazon acquired a
49% stake in Future Coupons Ltd, an unlisted firm of the Future Group, giving it an indirect stake in Future
Retail. The agreement also gave Amazon the right to buy a bigger stake in the Future Group flagship
company once India lifts restrictions on foreign investments in brick-and-mortar retailers.
Energy and
natural resources
Haldia Rationale: The Chatterjee Group ’s flagship company Haldia Petrochemicals (HPL) and global private
Petrochemicals equity firm Rhone Capital-acquired Texas based Lummus Technology from McDermott International for
acquires US an enterprise value of USD 2.7 billion . In this joint acquisition, Haldia Petrochemicals’ share is at 57%, the
firm Lummus balance would be held by Rhone Capital. Lummus Technology will function as a standalone autonomous
Technology for entity.
USD 1.5 billion
As per HPL’s press statement, this deal will accelerate India’s progress towards self-reliance in the
materials technology space. HPL, with two decades of experience in manufacturing polymer products and
downstream chemicals, would partner Lummus in evolving technological improvements for these segments.
HPL’s policy initiative to pivot upstream investments in ‘oil to chemical’ sector is likely to receive a major
boost as a result of association with Lummus.
Houston based McDermott will use the proceeds to repay debtor-in-possession financing as well as fund
emergence costs besides providing cash to its balance sheet.
Expert speak
One of the highlights of deal activity in

2020 was a near absence of insolvency
and bankruptcy driven deals due to the
moratorium of new insolvency admissions.
Whilst the unprecedented turbulence and disruption caused Hospitals for USD 285 million. Volatility in demand, fractured
by the pandemic in 2020 brought economic activity to a supply chains and availability of labour adversely impacted
grinding halt globally in Q2, a resilient and focused response manufacturing deals with a decline of 73% in deal values
from economic policymakers across top economies ensured an at USD 2.2 billion across 29 deals. Nuvoco’s USD 775 million
equally sharp resurgence in the subsequent quarters. acquisition of Emami’s cement business and Siemens’ USD 296
million acquisition of C&S Electric were the featured deals of the
India, despite being one of the worst-hit countries by the year in manufacturing.
pandemic, recorded a sharp resurgence in deal activity in
Q3 driven by the altered sentiment on global supply chain Start-ups and e-commerce collectively recorded 82 deals
dynamics favouring India and significant consolidation with USD 2.5 billion in deal value with Zomato’s USD 350
opportunity that emerged with several companies exposed with million acquisition of Uber Eats and Walmarts’ USD 1.2 billion
weaker balance sheets. Total deal values in 2020 surged 31% at investment into Flipkart being some of the largest transactions
USD 77.3 billion over 2019 while volumes saw marginal increase in this space. Driven by the successful REIT listing of the
to 1,300 deals compared with 1,258 in the previous year. M&A Embassy Office Parks and Aurobindo Realty’s acquisition of
deals jumped 36% to USD 37.5 billion, though on sharply falling GMR Infrastructure’s non-core Kakinada SEZ assets for USD 348
volume of 443 to 358 deals. PE deals surged 27% to USD 40 million, real estate witnessed some high value deals though deal
billion with 16% higher volumes at 942 deals. The acceleration activity was otherwise muted through the year with 5 recorded
of annual deal activity picked up pace in Q3 despite Q2 being deals.
a complete washout for the deal market as most corporates
grappled with internal cash flow issues and innovative ways Investment sentiment remained buoyant for retail and consumer
to dealing with business disruptions caused by the economic with a range of high profile deals, apart from Reliance Retail’s
standstill. acquisition of Future Group’s retail and wholesale business,
completed in the year including Hindustan Consumer’s USD 412
Though back-to-back mega deals clocked by Reliance across million acquisition of GSKs Consumer Health business, MTR’s
telecom/technology and retail contributed over USD 20 billion acquisition of Eastern Condiments and Aditya Birla Fashion
to deal values, a range of bulge bracket deals in infrastructure & Retail’s sale to Flipkart. One of the underscoring highlights
and energy kept the momentum high in H2 2020 with the year of deal activity in 2020 was a near absence of insolvency
witnessing nine deals in the billion-dollar club excluding deals and bankruptcy driven deals due to the moratorium of new
by Reliance Industries. A few notable deals in this category insolvency admissions for most part of the year.
being Haldia Petrochemicals’ acquisition of Lummus Technology
for USD 1.6 billion, Adani’s acquisition of Krishnapatnam port for Consolidation driven by COVID-19 disruption, value buying
USD 1.4 billion NTPCs acquisition of THDC and North Eastern of businesses weakened by the pandemic and accelerated
Electric Power aggregating USD 1.6 billion and Groupe ADPs expansion in favourable themes, such as technology, healthcare
strategic investment in GMR airports for USD 1.4 billion. and e-commerce, are likely to be the key investment themes of
2021. The resilience shown by the deal market coupled with
Technology, including enterprise, edtech and big data restoration of normalcy on back of vaccine availability are likely
analytics, and healthcare witnessed accelerated activity to bring back heightened momentum in private equity and M&A
driven by favourable dynamics of the disruption caused by transactions in the coming year.
the pandemic. Some deal highlights of the year included
Clarivates’ acquisition of Decision Resources Group owned by Sumeet Abrol
Piramal Enterprises for USD 950 million, Byju’s’ acquisition of Partner
WhiteHat Education for USD 300 million, Dr. Reddy Laboratories’ Grant Thornton Advisory Private Limited
acquisition of Wockhardt Ltds’ generics business for USD 260
million and Manipal Hospitals’ acquisition of Columbia Asia
Regulatory and
economic outlook
Tax and regulatory reforms
GST reforms
Insolvency and Bankruptcy Code
Ind AS
Companies Act
Amendments/regulations impacting AIFs
The Three Farmer Acts
RERA
Tax and regulatory
reforms
Economic reforms and indicators – Ministry of Finance extended due date for filing of
corporate tax returns for FY20 till 15 February 2021 and
for FY21 other tax returns by 15 January 2021
During 2020, despite the pandemic, the Government of India – Extension of due dates for completion of assessments
formulated Aatmanirbhar Bharat Abhiyan with an intention to extended to 31 March 2021
make India a strong and self-reliant manufacturing base and • Apart from the above, in the Equilisation Levy (Amendment)
globally competitive Indian products. The government proposed Rules 2020 notified by CBDT on 28 October 2020, the
a package of INR 20 trillion (i.e., 10% of India GDP) to cater to annual form (Form 1) applicable for an e-commerce
various sections of the economy with special focus on micro, operator has been introduced.
small and medium enterprises (MSMEs). To augment the flow
• New provisions related to tax deducted at source (TDS) for
of foreign direct investment (FDI) and increase the domestic
e-commerce operator and tax collected at source (TCS) on
manufacturing capability, the government has introduced
sale of goods, which were introduced in the Finance Act
production linked investment (PLI) scheme for an additional
2020, have been made effective from 1 October 2020.
12 sectors including electronic manufacturing services,
medical device, pharmaceutics, automobiles and automobiles
components, telecom and networking products, white goods
Foreign Exchange Management Act
and speciality steels. • On 13 August 2020, the RBI has issued revised guidelines
for governing the framework of core invest companies.
Budget expectations for FY22 The prominent changes to be noted in the guidelines are
a) Change in the adjusted net worth computation; b)
Finance minister has hinted that the Union Budget 2021-22
Constitution of group risk management committee by
will also focus on infrastructure while pushing further reforms.
certain CICs; C) Restricting the number of layers of CIC in
There is expectation that the government will continue to
the group
provide tax incentives to the formal sector so the informal sector
can migrate to the formal sector and increase the tax base. • Certain powers of authorised dealer banks under the
Considering the fiscal limitations, no significant incentives are Foreign Exchange Management Act (FEMA) has been
expected for the individual or salaried taxpayers. expanded under the extant export of goods and service
regulations, including allowing set-off of import and export
Key changes in direct tax payments within overseas group/associated parties. Further,
• The Taxation and Other Laws (Relaxation and Amendment of the RBI has reviewed and clarified that foreign law firms
Certain Provisions) Act, 2020 was passed on 28 September cannot establish presence in India by virtue of Liaison office
2020 relaxing the following compliances under the Income- or branch office without approval of RBI.
Tax Act:
Companies Act
– The scope of exempt income earned by CAT III AIF on
Due to the COVID-19 pandemic, the government has extended
account of transfer of certain types of securities subject
time limit for conducting annual general meeting for all
to fulfilment of certain conditions
companies till 31 December 2020. Further, it has extended
– Withholding tax rates reduced by 25% till 31 March 2021
one-time settlement scheme for companies and LLPs up to 31
– Due dates extended to 31 December 2020 for opting for
December 2020
direct tax amnesty scheme. Further, a notification by the
CBDT extends time limit for payment of disputed taxes
under VSV up to 31 March 2021
Expert speak
Deal activity in India had slowed down towards the end of 2019 on account
of several factors, including global challenges and concerns around India’s
macroeconomic indicators. This scenario was further aggravated by the COVID-19
crisis that impacted all the sectors. Investment activity currently appears to be
very buoyant, with FDI in sunrise sectors, particularly in Reliance Jio and its group
entities, getting strategic and equity investors of over USD 20 billion. This is now
being termed as an ‘FDI avalanche’ making India one of the most sought-after
countries for FDI investments in these times. Overall deal levels should also pick up
with investors tapping into opportunities emerging from the strong rebound of the
Indian economy post-COVID-19 crisis. All economic indicators have been positive
for quarter ending December 2020, retaining India as a promising investment
destination for 2021.
Sridhar R
Partner
GST reforms
The evolving Goods and Services Tax (GST) regime has started etc. In GST, CBIC gave numerous relaxations to both small
showing some signs of maturity. GST collections increased and large taxpayers ranging from extension of compliance
by approximately 3% from INR 11.77 lakh crore in FY19 to timelines, relaxation in penalty on delayed tax payments. There
INR 12.22 lakh crore in FY20. Further, increase of 65% in GST was further extension of the due date to file GST annual return
collection has been observed in FY20 as compared with FY18. and an audit report for FY19 along with reliefs in litigation
This has been made possible due to the measures taken by the procedures and extension in opting for composition schemes
government to ease out compliance burden on small taxpayers etc.
with a focus on SMEs.
While the government has tried helping taxpayers in these
Various steps, such as composition scheme for service challenging times, there is still a long way to go for tax regime
providers, reduced GST rates for housing schemes, reduced to be completely free from lacunas. One such immediate issue
GST rates for job work, exemption to small taxpayers from filing being faced by assessees as on date is while the due date to
of annual return and audit report, etc., have strengthened small file GST annual return and audit report for FY19 was extended
taxpayer’s confidence in GST by easing compliance burden to 31 December 2020, no parallel extension has come yet for
and thereby leading to better performance when compared FY20. GST authorities have created a paradox where due date
with previous year. For large taxpayers, the government to file annual returns and audit reports for two financial years
implemented many new initiatives, such as fully automated are now falling on the same date leading to confusion amongst
electronic GST refund processing, quoting of document the taxpayers. Adding to their misery, GST authorities have
identification number (DIN) on every document, Sabka Vishwas started issuing notices and initiating department audits on
(Legacy Dispute Settlement) Scheme, e-invoicing, QR code, taxpayers. All this, coupled with economic impact of COVID-19
etc., thereby benefitting all classes of taxpayers. on the businesses, is adversely impacting the ease of doing
business in India.
E-invoicing was finally rolled out for registered persons having
turnover of INR 500 crore or more from 1 October 2020, making
India one of the select group of countries with compulsory
e-invoicing as a part of indirect tax regime. With e-invoicing,
a standardised invoicing system has been introduced leading
to interoperability between multiple softwares and laying the
groundwork for the next major reform in GST, i.e., automated
periodical GST returns.
These policy measures were need of the hour in view of the

increased taxpayer base. Increase in number of registered
persons necessitated law makers to rejig the law from time to
time to meet public requirements. However, with
COVID-19 pushing India towards its first ever nationwide
lockdown, decelerated India’s real GDP growth to its lowest
in over six years. Steep fall in consumption of non-essential
products, closure of factories, supply chain disruptions coupled
with first-ever modern-era pandemic took a huge toll on
government’s revenue collection along with an obvious
human cost.
The INR 200 million Aatmanirbhar Bharat Abhiyan was

announced with an aim to revive the economy by providing
fiscal stimuli over and above numerous relief measures
announced by various institutions, including the RBI, CBIC,
Expert speak
With the country still grappling with the impact of the nationwide lockdown to curb
the spread of COVID-19, the government is expecting its revenues to be lower than
what had been budgeted for FY 2021 with increased expenses. However, there
are visible signs of relief pointing towards economic recovery with GST collections
crossing INR 1 lakh crore for the first time since February 2020 and at INR 1.05 lakh
crore in November 2020, almost 10% higher than the same time last year.
The government should now focus on increasing consumer consumption by

introducing some indirect tax incentives and interim sops in the form of abatement/
rate cuts and easing compliance framework. Further, rationalisation of tax structure
for some key sectors, such as healthcare industry needs to be at the top of the
agenda with 2020 proving that Indian healthcare system needs massive upliftment
and better preparedness for future contingencies.
Krishan Arora
Partner
Insolvency and
Bankruptcy Code
2020 was unprecedented as humans have not seen a and time taking. Also, some of the deals concluded under
pandemic of this scale in at least 100 years. The external IBC this year are likely to face implementation delays as the
shock to the economy caused by the COVID-19 pandemic successful bidders may be facing their own challenges due to
its resulting disruption to normal business operations initially COVID.
brought even the superpowers to their knees. India is but a
developing economy and catering to a massive 1.3 billion The outlook for 2021, as agreed by most analysts is far
population. Steps taken by the government, such as lockdown better than what was feared in the early days of the COVID
and relief measures announced, are also in unchartered pandemic. Businesses are learning to be more resilient and
territory and there is little consensus on the impact of such evolve with more efficient operating processes. From an
measures. One of the measures was amending the Insolvency M&A and capital markets perspective, we would witness a
and Bankruptcy Code (IBC) to effectively suspend any filings substantial number of deals for promoter financing, bridge
by creditors or sponsors for COVID-related defaults for a funding, mezzanine financing or equity stake sale deals,
period of six months, later extended till Christmas. The defaults opening a unique window of opportunity for private equity,
occurring post 25 March are being ring-fenced and not special situation funds and ARCs. Foreign capital will seek
considered as defaults at all for purposes of IBC. to build portfolio of quality assets available at value prices
caused due to short terms stress and on the other hand,
The RBI had also taken cognisance of this situation and quality business may need short term capital to tide over the
provided a moratorium on debt servicing for a period of six crisis. Certain sectors including aviation, hospitality and retail
months, which ended on 31 August 2020, benefitting several will take much longer to revive but at the same time alternate
businesses that faced short-term liquidity challenges due to the business channels are seeing exponential growth due to
impact of COVID and lockdown. In August 2020, the RBI also changing consumer behaviour.
provided a special window allowing one-time loan restructuring
aimed at granting relief to ailing businesses as well as helping
banks to manage the provisions in its books. Expert speak
While the over-burdened judiciary may focus on ongoing cases
and pre-March 25 default cases, the special needs for stressed This short window during
companies cannot be overlooked. The short-term cash flow suspended IBC filings offers a
needs could be met by the liquidity enhancement measures unique opportunity to plan and
introduced by the RBI but in long term, these businesses will implement pre-packs, a successful
require some intervention to remain solvent and tide over and effective tool yet to set foot
this crisis. In terms of deal activity, 2020 is nearing towards in Indian bankruptcy resolutions.
resolution of one of the largest insolvency case in aviation
Pre-packs differ from CIRP or
industry (Jet Airways) that now awaits court approval. H2
proposed loan-sale guidelines
2020 has also witnessed some of the largest deals in telecom
(Reliance Jio stake sale) and retail (Reliance Retail’s acquisition of RBI in one important aspect
of Future Retail) sectors. – they usually do not need a
public process (hence the name
The past year has been a year of pondering, analysing and pre-pack), which, despite bringing
experimenting for policymakers globally. India’s nascent some opacity, often may prove
bankruptcy code is slowly growing more teeth and standing to be the quickest route to a
on its feet. An important evolution that would help in increasing resolution of the sick entity.
effectiveness of deals under IBC is the amendment that
mandates voting on all resolution plans by the creditors. This Look forward to seeing where
would ensure higher participation in such processes by smart we are next year as this story
money. On the flip side, the roadblock to ARCs being able to
continues to unfold.
invest in equity of companies under IBC is an issue that still
needs to be resolved. While in 2020 foreign capital finds home Ashish Chhawchharia
in various attractive opportunities globally triggered by the Partner
pandemic, it may still find Indian processes quite cumbersome
GT Restructuring Services LLP
Ind AS
Financial year 2019-20 ended with the adoption and for instance assets may have suffered. The real impact of
implementation of Ind AS 116 on lease accounting, which disruptions will be witnessed in the financial years ending 31
fundamentally shifted the manner in which long-term operating December 2020 and 31 March 2021, where both the users and
leases are accounted for the lessees. Many companies that regulators will be expecting companies to make reasonable
are on lease model for their operating assets, such as office estimates resulting for those disruptions.
spaces, machineries, have witnessed a substantial change in
their balance sheet and income statement positions. In our view, the following should be critically examined:
• Impairment of financial and non-financial assets
The new lease standard preponed the recognition of • Computation of fair values that are not level 1 and therefore
contractual payments of long-term leases on the balance require reasonable degree of management estimations
sheet as financial liabilities and also pushed the rental costs • Revenue recognition for potential price adjustments and
below EBITDA to finance cost and depreciation/amortisation returns
of corresponding right to use assets. This accounting quite • Off balance sheet items, such as commitments, contingent
appropriately brings to the balance sheet contractual liabilities, guarantees
obligations companies had, which was earlier confined to only • Accounting for restructuring of loans
disclosures and therefore, enables the users of the financial • Classification of assets and liabilities (current vs non-
statements to clearly determine liabilities that a company has current)
signed up and committed itself contractually.
While, this standard has been welcomed across industries,

companies that are in aviation and shipping businesses were
impacted more owing to rentals being in foreign currencies, Expert speak
thereby resulting in volatility in the profit and loss account due
to change in exchange rates vis-à-vis Indian rupee. Earlier, since Preparers of Ind AS financial
there was no liability on the balance sheet and rentals were statements will have to exercise
recorded on recognise when due model, effect of exchange diligence in ensuring that
rates was limited to only rentals accrued for immediate expectations of users and
payments, whereas, with Ind AS 116, present value of all the regulators are met vis-à-vis impact
contractual payments through the life of the lease contract of COVID-19 disruptions of the
is recognised in the balance sheet and therefore, needs to financial results.
be restated in each reporting date/period for changes in the Only after the financial crisis of
exchange rates.31 March 2020 also ended with the onset of 2008, the economies are seeing a
financial reporting impact due to COVID-19, with the financial crisis of bigger magnitude unfold,
year 2020-2021 gearing up to witness how the accounting and hopefully, a lot has been
framework shall be able to assist the preparers, users and learnt from the criticism IFRS faced
regulators in determining how the financial statements of during the 2008 crisis and those
companies were truly affected and reported. learnings will be used by all, i.e.,
preparers, users, auditors, and
We witnessed detailed notes to the financial statements/results regulators to eventually achieve the
for the year ended 31 March 2020 by almost all companies common objective of true and fair
explaining the uncertainty resulting from disruptions caused financial position and results of the
by COVID-19. This disclosure was most appropriate, as it operations.
was important to explain the users of the financial results/
Ashish Gupta
statements how COVID-19 can impact the recorded values
Chartered Accountant
of assets and liabilities as of 31 March 2020, standards
Gurgaon
quite clearly outline the necessity to refrain from recording
unreasonable estimates for any potential losses in value that
Companies Act
The Companies Act 2013 (Act) was introduced in 2014 and raised by the outgoing auditor. The order also re-introduced
has undergone quite a few changes since it was first enacted, some of the requirements from the 2015 order that were
through rules, orders, circulars and amendments. removed in 2016, pertaining to internal audit function, cash
losses and utilisation of funds.
The recent changes made to the Companies Act have been
directed towards the twin objectives of promotion of ease of Lastly, the impact of the COVID-19 pandemic and subsequent
doing business and better corporate compliance. Following the lockdown led to temporary to severe long-term impact in the
Companies (Amendment) Act, 2019 introduced in the previous operations of most business entities. Recognising the practical
year which brought in rationalisation of fines and penalties, difficulties that arose as a result of the above pandemic and
shifting of corporate offences from special courts to in-house related restrictions, the MCA announced multiple relaxations
adjudication, relaxing certain compliance requirements, the from compliance requirements under the Companies Act,
Companies (Amendment) Act, 2020 (the Amendment Act) 2013 throughout the year that included extension of timelines
was notified in September 2020. The Amendment Act further for filing of returns/documents, holding of board meetings
rationalised penalties (45 out of the 66 amendments pertain to and general meetings including videoconferencing at relaxed
rationalisation of penalties), allowed payment of remuneration time-intervals, exemption from late payment of fees, extension
to non-executive directors in case of inadequacy of profits, of timelines for creation of deposit repayment reserve and
reduced timelines to speed up rights issue under Section 62 of mandatory investments for maturing debentures, etc.
the Act, provided exemption from filing of certain resolutions
by non-banking financial companies, exempted setting up
of corporate social responsibility (CSR) committee, allowed
setting off excess amount spent towards CSR in succeeding
financial years and direct listing of securities by Indian Expert speak
companies in permissible foreign jurisdictions as per the
prescribed rules. The Amendment Act has also re-introduced Overall, the government and
provisions related to producer companies as they existed in regulatory authorities have
the erstwhile 1956 Act. A new Section 129A has also been
continued the chosen path of
introduced, rules for which are yet to be notified, which would
ensuring ease of business by
mandate specified classes of unlisted companies to prepare
and file periodical financial statements, which currently is reducing compliance requirements
required only by listed companies under the applicable SEBI where possible, automating
regulations. submission and processing of
documents/returns, removing
Further, the Ministry of Corporate Affairs (MCA) introduced the difficulties faced by businesses,
Companies Fresh Start Scheme in March 2020 through which especially during the pandemic
filing of delayed annual returns and financial statements,
and promoting self-regulation
various other statements, documents and returns with the
for compliance with the Act and
registrar could be done without payment of additional fees
and immunity from prosecution or proceedings for imposing regulations as well as increased
penalty on account of delay associated with certain filings was governance norms. The agility with
granted. which the government announced
the compliance relaxations
Another highlight during the year was the issuance of the during the pandemic further
Companies (Auditor’s) Report Order, 2020 (CARO) which reinforced government’s will and
required the auditor to comment on specified items. This is consideration to ensure ease of
applicable for audit reports to be issued on the financial
doing business in India.
statements for the period beginning on or after 1 April 2021.
The new CARO report has extended the number of clauses Madhuri Ravi
for factual reporting from 16 to 21 along with expanding the
Chartered Accountant
reporting requirements of the existing clauses. Some of the new
Gurgaon
key additions to the auditor’s report include the requirements to
comment on matters relating to going concern, unutilised funds
towards CSR, evergreening of loans, objections and concerns
Amendments/regulations
impacting AIFs
Alternative Investment Funds (AIFs) industry has grown manifold • In addition to exemption from filing tax return granted
over the last few years. Nurtured by SEBI in 2012, AIFs have now to non-resident investors of Category I and Category II
become a key pillar to provide long-term, high-risk capital to AIF, an exemption is now granted from obtaining PAN on
multiple ventures, ranging from pre-revenue stage companies to satisfaction of certain conditions
early and late-stage companies to growth companies that wish • Income of non-resident investors in a Category I/II AIF not
to scale their operations. In addition, AIFs also help incubate taxable in India to the extent of outbound investments made
innovative ideas and invest in a broad array of sectors, ranging by the said AIF.
from fintech, e-commerce, healthcare, technology, education, • SEBI has issued clarification on applicability of stamp duty
real estate and infrastructure. Further, Category III AIFs tend to on issuance and transfer of AIF units and appointment of
provide a better risk-adjusted return to investors, by deploying RTA by 15 July 2020 to enable collection of applicable
diverse and complex strategies, such as arbitrage, margin stamp duty.
trading, algorithmic trading, futures and derivatives trading,
etc. to generate alpha returns for their investors.
The total number of AIFs have more than doubled over the
last three years (i.e., from nearly 280 AIFs in December 2016
to over 711 AIFs in December 2020). Further, the total capital Expert speak
commitments received by AIFs from its investors has increased
from INR 65,000 crore as on September 2016 to INR 4.05 lakh Like most of the industry, 2020
crore as of September 2020. More than 75% of the capital has been the year when the
commitments has been received by Category II AIFs. investment managers have pre-
Considering the capital raised by AIFs over the last few years, dominantly focused on slow
the government has sought to address some of the following growth and capital preservation
tax and regulatory issues faced by the AIFs: of their investments. The assets
• SEBI has issued template for Private Placement under management of the AIFs
Memorandum (PPM) for standardising the same and in India are expected to increase
introduced minimum benchmark for disclosure of and should show robust returns
performance of AIFs. Further, it has mandated annual audit as the global and the Indian
to ensure compliance with terms of PPM. economy is expected to rebound
• The recent higher rate of surcharge on capital gains income strongly in FY22. The alternative
earned by Category III AIFs (not set-up as Company/LLP) on investment space is expected to
transfer of listed equity shares, units of an equity oriented continue to have higher investors
mutual fund and units of business trust has been rolled
preference on an expectation of
back.
better risk-adjusted return and
• SEBI had recently released the operating guidelines for AIFs
set-up in International Financial Services Centre (IFSC), in with an enhanced disclosure
order to attract foreign investments in IFSC. standard mandated by the
• Income-tax exemption to Category III AIFs set-up in IFSC and SEBI with their recent changes
investing in securities listed in IFSC. in the AIF regulations. Further, it
• Income-tax exemption to unit holders of Category III AIF in is expected that new set of AIFs
IFSC of which all units are held by non-residents other than may come up in IFSC, pursuant
sponsor/manager. to the recent tax and regulatory
• Relaxation on filing income-tax return available to non- changes.
residents investing in Category I or II AIFs set-up in IFSC.
• Pass-through losses incurred by Category I and II AIFs. Amit Kedia
To further incorporate this amendment in the filings to be Chartered Accountant
made by AIFs, new format of Form 64C and 64D has been Mumbai
introduced and the due date for filing Form 64D has been
brought down to 15 June instead of 30 November from FY21
onwards.
The Three Farmer Acts
Prior to the introduction of major agricultural reforms in 1960s, Further, the CSO and NSSO data shared in Niti Aayog’s 2017
farmers faced numerous challenges in trading their produce. It report, outlines the disparity of income in farm and non-farm
led to introduction of state-specific laws under the Agricultural sector, which is only around 1/3rd of the income of a non-
Produce Marketing Committee (APMC) Acts. Agricultural trade agriculture worker in the past 30 years. As per the report, in last
was regulated that gave the farmers access to organised 22 years (1993-2015) nominal income of farmers increased
markets and setup Minimum Support Price (MSP) for their by 9.18 times however, taking away the effect of inflation, real
produce. The APMC Act mandated that purchase of certain farm income has just doubled. This reflects the urgent need for
agricultural commodities can only be through government- reforms which will help increase farmer’s income and bring it on
regulated markets (mandis) with the payment of designated par with other sectors. To address the current challenges and
commissions and marketing fees. Traders and intermediaries/ bring in holistic growth in the agriculture sector, three Acts were
middlemen (commission agents) typically require a licence to enacted by the government.
operate in these mandis issued by the APMC.
The Standing Committee on Agriculture (2018-19) observed

certain issues with APMCs that needed urgent intervention:
(i) Limited licenced traders that resulted in oligopolistic and
cartelised operations (ii) CESS/Levy by such traders also
imposes burden on value chain stakeholders.
What are the three Acts?

S. No Name of the Act About the Act Key features
1 The Famers’ Produce Allows farmers to sell their • Allows free trade of farmers’ produce, intra-state or inter-state;
Trade and Commerce produce wherever they want • Permits the electronic trading of scheduled farmers’ produce
(Promotion and (inside or outside of APMC) (agricultural produce regulated under any state APMC Act) in the
Facilitation) Act, 2020 and whoever they want to specified trade area;
and fetch better prices via • Abolishes market fee on farmers, traders and electronic trading
increased buyer base and platforms for trade of farmers’ produce conducted in an outside trade
increased competition area.
2 The Farmers’ Allows farmers to establish • Provides a farming arrangement between a farmer and a buyer, prior to
(Empowerment and contracts with corporate the production or rearing of any farm produce;
Protection Agreement investors and help them • Allows mentioning price of farming produce in the agreement;
on Price Assurance set mutually agreed • Allows district magistrate to lead the tribunal related to arbitration.
and Farm Services remuneration
Act, 2020
3 The Essential Allows the central • Empowers the centre to designate certain commodities, such as food
Commodities government to regulate the items, fertilisers, and petroleum products as essential commodities;
(Amendment) Act, supply of certain food items • Provides the centre authority to regulate the supply of certain food
2020 only under extraordinary items, including cereals, pulses, potatoes, onions, edible oilseeds and
circumstances (such as war oils, only under extraordinary circumstances. These include: (i) war, (ii)
and famine). Stock limits may famine, (iii) extraordinary price rise and (iv) natural calamity of grave
be imposed on agricultural nature;
produce only if there is a • Impose any stock limit on agricultural produce based on price rise. A
steep price rise stock limit may be imposed only if there is: (i) a 100% increase in retail
price of horticultural produce; and (ii) a 50% increase in the retail price
of non-perishable agricultural food items.
Expert speak
There is a certain section of traders and stakeholders that believe these Acts will eliminate
APMCs unless they rationalise their market fees in the long run, which is the presently
the main or only facilitator for most of their transactions. Moreover, it may also lead to
abolishment of minimum support price (MSP) of their produce, consequently exploitation
due to corporatisation of agriculture ecosystem.
Globally, most of the agriculture is run and dominated by corporates that leads to price
discovery and whenever the prices are low, government supports the farmers through
MSP or subsidies. The Acts are steps in the right direction but the government may need to
ensure that stakeholders/some genuine farmers’ concerns are addressed through mutual
consultation.
Kunal Sood
Partner
RERA
The COVID-19 pandemic has taken the world by a storm. In the

first half of 2020, the deal activity was almost nil and saw a
significant decline in the office absorption space that otherwise Expert speak
was the best performing asset class within the real estate
sector in the pre-COVID times. We expect 2021 will bring
the momentum back to the
We also witnessed a successful REIT listing of Mindspace
real estate sector as India
that provided the much-required hope that all is not lost and
becomes one of the preferred
investors will continue to prefer commercial real estate as an
FDI destinations. Emerging
asset class. The last few months of 2020 have seen renewed
asset classes, including
interest by investors in the sector with the announcement of
localisation of datacenter,
acquisition of Prestige commercial retail and office portfolio by
warehousing (due to
Blackstone.
e-commerce growth) and
The RBI had announced multiple measures including co-living will lead the deal
moratorium and restructuring schemes to provide much- momentum.
required cushion to the sector to weather this storm. Federal
Alok Saraf
and the state governments have been supportive by extending
Associate Partner
RERA deadlines and reducing stamp duty.
Grant Thornton Advisory
Private Limited
Private equity
dealscape
Sector focus
PE investment deal board 2020
PE investments - cities in focus
Notable PE investments in 2020
PE exit trend
Expert speak
Sector focus
India has attracted billions of dollars in an array of sectors. companies will broadly be utilised to enhance its product
While there were large-size investments in the core sectors offering by bringing in innovative technological aspects such
such as telecom, banking, real estate, manufacturing, as machine learning, AI, integrating IOT etc. and to expand into
energy; consumer and consumer tech sectors including retail, newer markets.
e-commerce, consumer-focused start-ups attracted maximum
deals in 2020. Investments in the banking and NBFC segments were driven by
the need to tackle the impact of the COVID-19 pandemic and
The success story of the Blackstone-backed first real estate increase the bank’s capital adequacy ratio, working capital
investment trust (REIT) in India, Embassy Office Parks REIT, and for asset creation. The year witnessed telecom company
paved the way for investors to access a new source of capital Jio Platforms raising USD 9.8 billion from 11 global investors
in the country thereby injecting more funds in the country’s forming 25% of the total PE deal values in 2020. KKR’s USD
real estate sector. The tech savvy sectors such as start-ups, 1.5 billion investment in Jio Platforms marks the firm’s largest
e-commerce and IT & ITeS constituted 78% of the overall investment in Asia.
PE investment volumes in 2020. The funds raised by these
Start-up E-commerce IT and ITeS

484 501 606 43 54 84 32 48 43
4,677 5,273 4,612 2,041 3,469 3,058 584 1,723 1,402
Energy and natural Banking and Pharma, healthcare Retail and

resources Education financial services and biotech consumer
17 11 15 23 17 23 46 41 29 24 31 31 38 25 33
1,858 3,939 1,540 568 620 1,179 1,936 3,361 1,711 1,254 1,438 2,354 674 332 6,530
Media and Transport and

Telecom Manufacturing entertainment Hospitality and leisure logistics
2 13 11 7 10 17 18 10 11 10 9 5 4 8
4,359 9,844 593 538 2,541 270 835 407 717 709 48 185 131 414
Infrastructure Agriculture and Professional/

management Automotive forestry Real estate business services
5 7 4 5 7 4 4 6 6 23 20 7 6 6 7
1,092 1,537 441 215 290 548 1,211 48 45 2,763 2,401 3,507 33 375 22
Aerospace and Top sectors based on deal volumes

defence sector
Volume 2018 2019 2020
1 1
3 3
Values USD mn 2018 2019 2020
PE investment deal
board 2020
Top 10 deals in 2020 accounted for 1% investment volumes with 33% investment values. The year recorded 10 deals in
the billion-dollar category and 66 deals valued between USD 100 million and USD 999 million together accounting for
83% of total PE deal values with only 8% of deal volumes.
Investor Investee Sector % stake Investment

values USD mn
Brookfield Asset RMZ Corp- 12.5 million Real estate 18.00% 2,000 The deal marks the largest-ever
Management Inc square feet of its real estate deal in the Indian real estate
assets and CoWrks
industry in India
Vista Equity Partners Jio Platforms Ltd. Telecom 2.30% 1,496
KKR Jio Platforms Ltd. Telecom 2.30% 1,496 KKR & Co. announced it is
USD1.5 billion investment
in Reliance Industries’ Jio
Platforms, which is the
Public Investment Jio Platforms Ltd. Telecom 2.30% 1,496
Fund (PIF)
investment management firm’s
largest investment in Asia.
Public Investment Reliance Retail Ventures Retail and 2.00% 1,291

Fund Ltd. consumer
The Blackstone Prestige Group – Carved Real estate N.A. 1,238 India’s third-biggest real estate
Group Inc. out Commercial, Retail and deal in India since 2011.
Hotel assets
Mubadala Jio Platforms Ltd. Telecom 1.90% 1,197
Templar Investments Jindal Steel and Power Manufac- 100% 1,000

Ltd. Limited- Jindal Shadeed turing
Iron and Steel Co LLC
Silver Lake Reliance Retail Ventures Retail and 1.80% 1,000
Ltd. consumer
Blackstone Group Inc Piramal Glass Private Manufac- N.A. 1,000 This will be Piramal Group’s
Limited turing second billion-dollar deal
this year to capitalise the
conglomerate which has a large
NBFC unit
PE investments -
cities in focus
Bengaluru, Mumbai, Delhi and Gurugram remained top cities both in terms of attracting investment deals and values, together
equaling 77% of the total PE deal volumes and inflows of USD 37.1 billion, a 93% of overall PE share. These cities remain highly
conducive for PE investments on the back of good infrastructure, business-friendly policies and home to mushrooming start-ups in
the country. Tier 2 cities, including Noida, Ahmedabad, Kolkata and Jaipur have also witnessed active PE investment from investors
during the year as these cities offer a variety of opportunities to business houses and establishments.
Start-ups dominated in all the top cities in terms of funding volumes demonstrating an equal opportunity for innovative business.
Apart from start-ups, e-commerce, pharma, agriculture, IT and energy sectors also witnessed PE activity in these top cities. Kochi,
Indore, Goa, Bihar, Bhubaneshwar and Chandigarh also remained active in terms of recording PE investments.
Gurugram
Delhi Top sector: Start-up
Values: 4,053 | Volume: 111 Values: 555 | Volume: 83
Top sector: Start-up Leading: E-commerce
Values: 337 | Volume: 75 Values: 727 | Volume: 12
Leading: E-commerce
Noida
Jaipur Top sector: Start-up
Top sector: Start-up Leading: Agriculture and
Values: 35 | Volume: 7 forestry
IT & ITeS
Ahmedabad
Leading: Pharma, healthcare
Kolkata
and biotech
Mumbai Leading: Energy and natural
Values: 22,211 | Volume: 210 resources
Values: 427 | Volume: 102 Hyderabad
Leading: E-commerce Values: 743 | Volume: 25
Values: 384 | Volume: 23 Top sector: Start-up
Leading: Pharma, healthcare
Pune and biotech
Top sector: Start-up Bengaluru
Leading: IT and ITeS Top sector: Start-up
Leading: E-commerce
Chennai
Values in USD mn Leading: E-commerce
Notable PE investments
in 2020
Telecom
Jio Platforms Rationale: After raising USD 5.7 billion for 9.99% stake from Facebook Inc., and USD 4.4 billion for 7.73%
raises USD 20 stake from Google LLC, Reliance Jio Platforms has raised an additional USD 9.5 billion from a roster of nine
billion from high-profile investors in two months.
leading global
investors Silver Lake Partners bought ~1% stake in Jio Platforms for USD 744 million in a deal that took Jio’s
enterprise value to USD 68 billion – a 12.5 premium to the value indicated by Facebook. This was followed
by Vista Equity Partners, which picked up a 2.32% stake for USD 1.5 billion, making it the third high-profile
investment in the RIL unit. Further, General Atlantic bought a 1.34% stake for USD 868 million. KKR bought
a 2.32% stake for USD 1.5 billion. Mubadala bought 1.85% for USD 1.2 billion followed by Silver Lake’s
additional investment of USD 744 million for 1.15% stake.
Abu Dhabi Investment Authority invested USD 748 million for 1.16% stake. The TPG and L Catterton ‘s USD
598 million and USD 249 million for 0.93% and 0.39% stake respectively, comes less than a week after the
two sovereign wealth fund (ADAI and Mubadala) deals. Saudi Arabia’s Public Investment Fund’s (PIF) USD
1.5 billion investment for 2.32% stake marked the latest addition to Jio Platform’s investors list. Ambani said
that the capital has helped him repay Reliance Industries’ net debt of USD 21 billion well ahead of schedule.
The oil-to-retail giant, which was debt-free in 2012, is now net debt-free.
Retail and consumer
Reliance Retail Rationale: Reliance Retail Ventures (RRVL) raised a total of USD 6.4 billion in a span of three months from
Ventures raises returning investors that invested in Reliance’s digital unit, Jio Platforms Ltd., earlier this year. The investment
USD 6.4 billion spree began with Silver Lake’s USD 1 billion for 1.75% stake followed by KKR’s 1.28% stake in the company
from leading for USD 740 million. The retail arm of Reliance Industries Limited raised USD 844 million from Mubadala for
global investors 1.4% stake, GIC and Abu Dhabi Investment Authority each invested USD 745 million for 1.2% stake followed
by USD 248 million invested by TPG for 0.4% stake.
Silver Lake Partners has invested an additional USD 253 million for a 0.38% stake. This brings the total
investment by it and its co-investors to USD 1.3 billion. This will translate into a 2.13% stake in the company
on a fully diluted basis. Reliance Retail raised USD 497 million from General Atlantic for 0.84% stake.
Further, the PIF has invested USD 1.3 billion for an equity stake of 2.04% in Reliance Retail Ventures Ltd. This
investment will further strengthen PIF’s presence in India’s dynamic economy and promising retail segment.
The investment values RRVL at a pre-money equity value of USD 62.4 billion. The investment in RRVL by PIF
is the eighth investor in RIL’s retail arm within two months. Silver Lake, KKR, General Atlantic, Mubadala,
GIC, TPG and ADIA have been the other investors so far. Thus, within two months, the retail firm has sold a
10.52% stake raising a total fund of nearly USD 6.4 billion. The investment will add fire to Mukesh Ambani’s
battle for dominance in the retail market that is also being eyed by Jeff Bezos’ Amazon.com and Walmart
Inc.’s Flipkart.
PE exit trend
2020 has been the worst year for PE exits as the year witnessed certain sectors and segments remained unaffected. Sentiments
the lowest exit volumes since 2013. Exit values also recorded were buoyed by reports of various governments claiming to
their lowest. Normally, PE/VCs hold on to their investments bring vaccines by the end of this year.
during an economic crisis or downturn due to decrease in
valuations, which was witnessed in Q2 when the impact of the Sectors such as banking, pharma and healthcare, IT and
COVID-19 pandemic was at its peak. However, by the advent start-up witnessed substantial traction in the second half of
of the third quarter, economic activity showed recovery and 2020 due to a rise in the digital economy that led to increased
deal activity, which also resulted in some exit deals.
Exit volumes
PE exit volumes Exit route
Secondary sale
Open market transaction
Buyback
IPO
M&A
2018 2019 2020
2018 2019 2020
Full exit Part exit
Sector exit by volumes Sector exit by values

5%
7%
18% 18%
8% 26%
7%
18% 12%
11% 15%
13%
14% 14%
14%
Banking and financial services Start-up Manufacturing Real Estate
Manufacturing Pharma, healthcare and biotech Pharma, healthcare and biotech E-commerce
IT & ITeS E-commerce Start-up Banking and financial services
Others IT & ITeS Others
Notable PE exits
Investor exited Investee company Part/full exit Sector
Blackstone Group Lp Embassy Office Parks REIT Part exit Real estate
Blackstone Group Lp Essel Propack Ltd. Part exit Manufacturing
Warburg Pincus Ecom Express Pvt. Ltd. Part exit E-commerce
SAIF Partners, Accel, Norwest Venture Partners, RB Bundl Technologies Pvt. Ltd.- Part exit Start-up
Investments, Harmony Capital and Bessemer Venture Partners Swiggy.com
Advent International and Temasek Crompton Greaves Ltd.- Part exit Manufacturing
Consumer Products division
Capital International Intas Pharmaceuticals Ltd. Full exit Pharma, healthcare and biotech
Baring Private Equity Coforge Ltd. Part exit IT & ITeS
Baring Private Equity Manappuram Finance Ltd. Part exit Banking and financial services
Expert speak
We are witnessing a lot of deal

negotiations, due diligence and this
augurs very well for PE deals as we
move into 2021.
We witnessed PE deals of USD 40 billion in 2020, which was sufficient financing to navigate during this period.
higher in terms of deal values compared with both 2019 (USD • In my view, we will witness a lot of consolidation within the
32 billion) and 2018 (USD 21 billion). PE portfolio companies as some companies will struggle to
navigate the crisis and make commercial sense for stronger
The highlight for the year was Reliance Jio deal, which saw companies to buy. We could also expect VC Funds playing
investor participation from all the top global PE Funds and a role to consolidate and merge portfolio companies in the
global technology majors such as Facebook and Google. same sector and line of business to leverage synergies.
This is a landmark deal and augurs well for the Indian digital • PE funds are expected to focus on sectors including
economy and Digital India initiative given the marquee healthcare, medical devices, ed-tech, agri-tech, e-commerce,
investors backing Jio and is one of the top global deals in fintech and technology companies. Deal activity is expected
recent times. Given Jio’s significant consumer base now, to increase in 2021.
the digital platform would provide an opportunity to build in • While valuations have taken a hit in most sectors, the
digital commerce, digital entertainment, digital payments and technology sector continues to be strong and emerging
perhaps enable an integrated digital commerce platform for sectors such as ed-tech, health-tech, fin-tech continue to be
Indian consumers to transact on. increasing as businesses go digital.
While PE deal activity was impacted immediately post the PE funds have raised the bar on new investments and the
pandemic, deal activity continued to be strong in sectors intensity and robustness of due diligence has increased in the
including technology and buy-outs. While there was a following areas:
slowdown in venture capital fund activity in first half of the
1 Business due diligence around the existing business model,
year, we witnessed recovery in the second half and robust
risks and opportunities
deal flows as well as investments by funds such as Sequoia,
2 Quality of earnings and impact of COVID-19 on the
Chiratae.
financials and earnings
In the last three months of 2020, deal activity has picked 3 EBITDAC assessment is a must on all deals, which is earnings
up quite a lot, especially in sectors such as technology, before interest tax depreciation and COVID items
healthcare, ed-tech and fin-tech. We are witnessing a lot of 4 Cyber and technology due diligence
deal negotiations, due diligence and this augurs very well for 5 Management due diligence covering aspects of leadership,
PE deals as we move into 2021. resilience and integrity
• Buyouts continue to be robust with deals such as Carlyle’s
PE deal trends in 2020 and outlook investment into Sequent Scientific, KKR-JB Chemicals and
for 2021 Blackstone’s acquisition of Piramal Glass. In my view, we
would expect to see the increasing trends of buyouts as
• The pandemic clearly impacted the deal activity from March management control and turnaround will become
2020. The focus of PE Funds immediately post the pandemic key in the coming years.
was to get portfolio companies preserve value and ensure
• The other area expected to increase is stressed asset In summary, the technology sector dominated PE deals in 2020
transactions as India will battle financial stress of many and this trend is expected to continue as digital, automation,
corporates across sectors especially in industrials, technology, AI and data analytics becomes embedded in
manufacturing, real estate and infrastructure. Global every business. Further, sectors such as renewable energy,
and Indian stressed asset funds are clearly viewing this infrastructure, financial services and e-commerce will continue
as an investing opportunity and we should expect deals to generate PE interest in 2021.
momentum to pick up in the stressed asset space in 2021.
• PE exits did take a hit during 2020 as expected, but we India has already become one of the top destinations for PE
are witnessing slow but sure recovery around initial public Funds globally and will emerge stronger as an investment
offerings, domestic M&A’s and secondary deals. destination in 2021 and as we move into the next decade.
• Another aspect that will trigger PE exits would be the
opportunity for Indian corporates around overseas listings.
The Indian government announced in May 2020 the ability Raja Lahiri
of Indian private companies to raise capital overseas without Partner
being listed in India first. While the regulations are yet to Grant Thornton Bharat LLP
be implemented, in my view, this would be key to watch-out
for Indian corporates in 2021. Overseas listings can open
a massive opportunity for Indian corporates and start-up
unicorns to tap into the overseas capital markets and
enabling exits of existing investors.
• Fundraising activity for PE and VC funds took a pause this
year. Although, the dry powder for new investments remains
strong. We expect PE fundraising activity to get better
in 2021. We ended 2020 with National Investment and
Infrastructure Fund Ltd (NIIF) completing fund raising of USD
2.3 billion, which is a very positive news for the Indian funds.
Start-up India
Deal trend
Start-up funding (2018-2020)
Geographic representation by top cities
Sector classification
Expert speak
Deal trend
M&A trend
The overall M&A activity saw a 9% decline in the deal values. One of the reasons for the increase in deal activity
volumes with about a 58% fall in deal values at USD 1.1 is the uncertainty in the business environment caused by
billion compared with USD 2.6 billion in 2019. The fall in the the pandemic that compelled companies to combine their
deal values is attributed to RA Hospitality Holdings-OYO strengths to battle the business downturn and seek new
rooms transaction valued at USD 2 billion in 2019. However, opportunities. This also supported the deal volumes increase
barring this deal, 2020 recorded an 88% increase in the deal from 28 deals in H1 2020 to 43 deals in later half of the year.
summary

Deal
Top deals
PayU- Citrus PropTiger- Olacabs- Vogo RA Hospitality Zomato- Uber eats

Payment Housing.com Automotive Holdings- Oyo (USD 350 mn)
(USD 130 mn) (USD 250 mn) (USD 100 mn) rooms
(USD 2 bn)
2 1 2 2 3
3.0 80
70 75
2.4 70
2.5
53 60 60
2.0 47
45 43 50 Volumes
USD bn
37
1.5 41 40
30
1.0
0.6 15 0.6
0.5 0.5 13 20
0.5 0.3 0.3 0.4
0.2 0.2 10
0.1
0.0 -
H1 H2 H1 H2 H1 H2 H1 H2 Q1 Q2 H2
2016 2017 2018 2019 2020
Va l ues USD bn Vol umes

Deals estimated and valued over USD 100 mn Pre-Covid Covid Unlock
Retail Real estate tech Travel, Transport Travel, Transport Edtech

Top sector by
volume value
(22%) (35%) & Logistics & Logistics (36%)

(34%) (78%)
Retail Discovery Fintech Enterprise Edtech

(17%) platform (19%) application and (17%)
(14%) infrastructure
(17%)
PE trend
Start-ups raised USD 4.6 billion across 606 investments, in investment volumes while values more than doubled
highest yearly volumes in last four years and third highest compared with H1 2020. Start-ups are working tirelessly to
in last 10 years. While demonetisation laid the groundwork garner investor cheques by coming up with new advancement,
for mass acceptance of digital world, the onset of the innovative products to adapt to the ‘new normal’, creating new
COVID-19 pandemic with social distancing norms and market offerings to drive expansion and scale new business
compliance protocols accelerated the pace of transitioning verticals. PE/VC investors fueled the investment environment by
towards a robust contactless economy. This pushed the launching new funds from the likes of Info Edge and Lightspeed,
investment activity in H2 2020 that witnessed 31% increase which is a booster shot for the Indian start-up ecosystem.
summary
Deal
Top deals
Hike Ltd. OYORooms.com Swiggy.com Udaan PhonePe

(USD 175 mn) (USD 250 mn) (USD 1 bn) (USD 585 mn) (USD 700 mn)
5 5 12 22 17
4.0 3.6 400

346 344
3.5 323 350
2.9 276 3.1
3.0 300
246 243 241
225
2.5 205 250 Volumes
USD bn
2.0 1.8 200

1.6
136 126
1.5 1.2 1.2 1.2 150
0.9 1.0
1.0 100
0.5
0.5 50
0.0 -
H1 H2 H1 H2 H1 H2 H1 H2 Q1 Q2 H2
2016 2017 2018 2019 2020
Va l ues USD bn Vol umes

Retail Travel, transport Food tech Retail Fintech

Top sector by
volume value
(24%) & logistics (24%) (30%) (27%) (35%)
Retail and Enterprise Fintech Retail Fintech

discovery platform applications & (18%) (16%) (17%)
(13% each) infrastructure
(14%)
Top 5 M&A deals accounted for 74% of the total M&A start-up deal values
comprising 7% of volumes
Acquirer Target Sub-sector %stake USD mn
Zomato Media Pvt Ltd Uber Technologies Inc.- Uber Eats India Pvt. Ltd. Travel, Transport & Logistics 100% 350
Think & Learn Pvt Ltd- Byju's WhiteHat Education Technology Pvt. Ltd.- WhiteHat Jr. EdTech 100% 300
Vitalic Health Pvt. Ltd. (60%) and 100% in its
Reliance Retail Ventures Ltd subsidiaries, Tresara Health Pvt. Ltd., Netmeds Market Health Tech N.A. 83
Place Ltd. and Dadha Pharma Distribution Pvt. Ltd.
Sorting Hat Technologies Private
Prepladder Pvt. Ltd. EdTech 100% 50
Limited- Unacademy
GoodWorker Pravasi Rojgar HR Tech N.A. 34
Top 5 PE deals in 2020 accounted for 29% of total PE start-up values with 1%
of investment volumes
Investor Investee Sub-sector % stake USD mn
PhonePe Internet Private
Walmart Inc and existing investors Fin Tech 13% 700
Limited
DST Global fund, Exor Seeds, Unbound and Moore Strategic
CARS24 Services Private Ltd. Auto Tech N.A. 200
Ventures
SoftBank, General Atlantic, Sequoia India, Nexus Venture Sorting Hat Technologies
EdTech N.A. 150
Partners, Facebook, and Blume Ventures Private Limited- Unacademy
Glance Digital Experience
Google and Mithril Capital Media Tech N.A. 145
Private Limited
Investment Corporation of Dubai, Investcorp, Ascent Capital,
US International Development Finance Corporation (DFC), Freshtohome Foods Pvt. Ltd. Food Tech N.A. 121
the Allana Group and Iron Pillar
Start-up funding
(2018-2020)
Start-ups raising highest rounds of funding in the last three years
7 6 6 6
USD 42 USD 359 USD 34 USD 334
Vogo Automotive Pvt. Ltd. Curefit Healthcare Pvt. Ltd. Doorstep Retail Solutions Sorting Hat Technologies
Pvt. Ltd.- Milkbasket Private Limited- Unacademy
5 5 5 5
Billionbrains Garage Ventures Eat Good Technologies Pvt. Mohalla Tech Pvt. Ltd. - Zorba Renaissance Pvt.
Private Limited- Groww Ltd. - HungerBox Sharechat Ltd. - SARVA
4 4 4 4
Acko General Insurance Aesthetic Nutrition Pvt. Bigwin Infotech Private Bunch Microtechnologies Pvt.
Limited Ltd. - Power Gummies Limited- Paisadukan Ltd. - Classplus
4 4 4 4
CARS24 Services Private Ltd. Dunzo Digital Pvt. Ltd. Gensol Mobility Pvt. Ltd. - Hella Infra Market
Blu-Smart Mobility Pvt. Ltd Limited- Infra.Market
4 4 4 4
USD 1,160 USD 22 USD 310 USD 171
Hiveloop Technology Pvt. Neblio Technologies Pvt. Ola Electric Mobility Pvt. Rivigo Services Pvt. Ltd. -
Ltd. - Udaan Ltd. - CoinDCX Limited Rivigo
4 4 4 4
Sterne India Private Super Highway Labs Pvt. Ltd. - Trell Experiences Pvt. Ltd. Vivriti Capital Pvt. Ltd.
Limited- arzooo.com Shuttl
62 Annual Dealtracker Funding round Funds raised (mn)

Start-ups that raised over USD 100 million funding in aggregate during 2018-2020
3 4 1 1
USD USD USD 700 USD
1,310 1,160 400
Bundl Technologies Pvt. Hiveloop Technology Pvt. PhonePe Internet Private Paytm E-commerce Private
Ltd.-Swiggy.com Ltd. Udaan Limited Limited- Paytm Mall
6 4 6 4
USD 359 USD 343 USD 334 USD 310
Curefit Healthcare Pvt. Ltd CARS24 Services Private Sorting Hat Technologies Ola Electric Mobility Pvt.
Ltd. Private Limited- Unacademy Limited
5 3 2 2
USD 260 USD 220 USD 200 USD 190
Mohalla Tech Pvt. Ltd. Home Interior Designs Dreamplug Technologies Pvt. Glance Digital Experience
Sharechat E-Commerce Pvt. Ltd. -Livspace Ltd.-Cred Private Limited
3 3 4 4
USD 190 USD 187 USD 173 USD 171
Zinka Logistics solutions Fashnear Technologies Acko General Insurance Rivigo Services Pvt. Ltd. -
Pvt. Ltd. -Blackbuck Pvt. Ltd.-Meesho Limited Rivigo
3 3 3 2
USD 152 USD 141 USD 131 USD 128
Freshtohome Foods Pvt. Resilient Innovations Galactus Funware Technology Go Digit Infoworks Services
Ltd Private Limited- BharatPe Private Limited- Mobile Premier Pvt. Ltd. - Digit Insurance
League (MPL)
2 2 1 2
USD 125 USD 125 USD 110 USD 110
UrbanClap Technologies Ideas Infolabs Pvt. Ltd. - BusyBees Logistics Solutions Lendingkart Technologies Pvt
India Pvt. Ltd. Ninjacart Pvt. Ltd. - Xpressbees Ltd- Lendingkart.com
Funding round Funds raised (mn) Annual Dealtracker 63

Geographic representation
by top cities
Bengaluru, Mumbai, Gurgaon and Delhi dominated the start-up ecosystem, both in terms of new companies emerging and the
infusion of funds. They garnered a major chunk of the start-up funding with 78% funding volumes and 82% funds recorded
in 2020. While tier 1 cities such as Chennai, Hyderabad, Pune continued to dominate the start-up space, tier 2 including
Ahmedabad, Goa, Jaipur, Kolkata, Kochi and Indore gained momentum and remained home to start-ups aided with access to
technology. Further, the availability of talent pool, local investor confidence and infrastructure support have in turn supported
emerging entrepreneurs and start- up communities, growing in these cities.
Gurugram
Value | Volume
Delhi M&A 32 7
Value | Volume PE 555 83
M&A 75 10 Total 587 90
PE 337 75 Faridabad
Total 413 85 Value | Volume
M&A - -
PE 83 2 Noida
M&A 2 1
Jaipur PE 53 20
Value | Volume Total 55 21
M&A 5 1
PE 35 7
Total 40 8
Ahmedabad
Value | Volume
M&A 5 1
PE 15 10
Total 20 11
Mumbai
Value | Volume
M&A 352 16 Kolkata
PE 427 102 Value | Volume
Total 779 118 M&A 350 1
PE 10 7
Pune Total 360 8
Value | Volume
M&A 6 2
PE 209 27 Hyderabad
PE 32 19
Goa Total 32 19
Value | Volume
PE 4 3
Total 4 3
Bengaluru
Value | Volume
M&A 127 28
Indore PE 2,756 209
Value | Volume Total 2,883 237
PE 8 4
Total 8 4
Chennai
Kochi Value | Volume
Value | Volume M&A 88 2
PE 11 5 PE 113 13
Total 11 5 Total 201 15
Start-up classification based on business model breakdown: M&A and PE
2020 saw surge in the B2C focused start-up raising funds micro enterprise and SME segments grow following the easing
to cater to the large consumer segment amid the disruption of COVID-19-induced lockdown restrictions. The start-up
caused by the pandemic. Around 54% funding were led ecosystem in the country has also evolved over time. From
in the B2C start-ups however, B2B segment also witnessed being focused on B2C, it turned towards fin-tech, especially the
considerable activity of funding mainly in the enterprise revolutionary changes emanating from digital payments. Now
application and infrastructure and fin-tech space helping it has moved into the world of software as a service (SaaS).
Start-up breakup based on business model (pan India)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2018 2019 2020 2018 2019 2020 2018 2019 2020 2018 2019 2020
Volumes Values Volumes Values
M&A PE
B2B B2C Both C2C P2P
Funding series summary

Overall, 2020 had witnessed sharp fall in the growth and capital firms and start-ups are being positive with regards to
late-stage funding rounds compared with 2019. The volumes the current and future impact of the COVID-19 pandemic.
declined by 21% while values reduced over 60%. Many VCs are looking to fund the technologies being developed
companies have been hit hard by the resonating impacts of the or already accelerating in usage due to the ripple effects of
COVID-19 on the business environment. However, early-stage policies and economic impacts. Some early-stage investors
funding witnessed growth both in terms of funding volumes by are staying active as they sense opportunity amid standout
47% and funding values by 60%. The average deal size across companies able to keep exhibiting robust engagement during
early-stage start-ups in India increased to USD 1.96 million this time. But otherwise, funds continue to concentrate at the
from USD 1.8 million in 2019. With the overall statistics, venture later stages.
2.0 350
1.8
1.8 316
300
1.6
1.4 250
1.2
1.2 215
USD mn
Volumes
200
1.0
150
0.8 0.7
0.6
0.6 0.5 0.5 0.5 100
82 0.4
0.4
0.4 0.4 0.3
61 0.2
42 0.2 50
0.2 36
- 20 18 0.02
- 17 6 45 1 1 0
>=Pre series A Series A Series B Series C Series D Series E Series F
2019 Values 2020 Values 2019 Volumes 2020 Volumes
Data based on disclosed funding series
Sector classification
PE
While growth-PE stage and late-stage firms have a proven Unacademy’s Series F funding of USD 150 million made
business model in place, these companies will still have to prove Unacademy join Byju’s as the only other ed-tech unicorn in
they are relevant in the new economy. In case of seed/early- India. This was followed by Cars24’s USD 200 million funding
stage start-ups, the situation will be cautious with investors round that resulted in it being the first Indian start-up in the
wanting to be extra careful about what business models and automotive sector to achieve unicorn status, as a raging
sectors will work post-COVID. pandemic prompted consumers to shift towards personal
mobility. Other notable deals include, Munich Re Ventures
Fin-tech continues to stay on the top spot with 17% sector
investment into Acko General marked its foray into India’s
volumes and 35% values. The situation spurred a wave of
insurance market; Makers Fund and Courtside Ventures
innovation in digital workflows, virtual gaming and online
investment into WinZo marked first-ever investment by two
education segment. With emphasis being placed on remote
venture capital funds in an Indian gaming firm. It was also the
working environment and the lack of full mobility, start-ups
largest investment into an Indian gaming start-up since the
focused on virtual collaboration platforms with enterprise
COVID-19 pandemic.
application and infrastructure solutions and alike. The retail,
hyperlocal delivery, online groceries, agri tech, food tech, auto
tech attracted investors attention with investment volumes
almost doubling in these segments compared with 2019.
PE sector Classification
Fintech Others On-demand services
86 77 100 37 36 30 28 18 22
587 976 1,623 69 200 82 222 183 237
Retail Agritech Autotech

61 79 67 3 12 28 5 6 16
909 1,429 298 4 39 103 51 112 241
Edtech Data analytics and AI Gaming

15 27 65 26 28 27 5 13 16
84 105 449 48 108 57 14 69 143
Enterprise applications Discovery platforms HRtech

and infrastructure 33 20 24 5 10 12
50 39 52 241 66 62 10 28 37
171 160 199
Healthtech Foodtech Real estate Tech

48 42 45 15 15 23 2 9 12
329 334 260 1,381 114 182 11 50 97
Travel, transport and Mediatech Networking Platforms

logistics 10 13 23 8 6 7
47 51 37 30 17 199 131 120 85
384 1,162 259
Top sectors based on deal volume
Volume 2018 2019 2020

Values USD mn 2018 2019 2020
M&A
While 2018 was dominated by acquisitions in fintech and travel, Retail, Enterprise Applications & Infrastructure, fin-tech, HR-tech
transport and logistics segment, 2019 witnessed heightened segments have remained active with consolidations together
interest from strategic investors in the enterprise applications constituting 34% of the start-up volumes. Even as entrepreneurs
and infrastructure and data analytics, big data and AI space, joined forces through M&As to tackle the pandemic, the
2020 was dominated by consolidation in the ed-tech segment. year saw muted large dollar deals across segment. However,
Consolidation volumes in this segment grew by 2x and 5x Zomato’s acquisition of Uber Eats and Byju’s acquisition of
times while values spiraled by 25 times and 38 times compared WhiteHat Jr. kept the momentum going with the deals forming
with 2018 and 2019, respectively. The COVID-19 pandemic the top two deals for the sector.
created a demand for online learning and with this move, there
are new growth opportunities that await the ed-tech sector.
M&A sector Classification

Edtech Healthtech Real estate Tech
4 2 12 3 7 4 2 2 3
15 10 397 15 31 90 5 14 16
Retail On-demand services Autotech

12 8 8 8 3 4 2 2 2
87 213 38 31 62 16 66 10 10
Enterprise applications Travel, transport and Data analytics and AI

and infrastructure logistics
8 9 2
9 13 6 18 7 4 31 45 5
40 77 24 269 2,026 365
Fintech Discovery platforms Foodtech

21 6 5 9 4 3 8 1 2
97 30 20 45 15 12 53 1 6
HRtech Gaming Agritech

1 2 5 1 3 3 1 3
5 10 55 1 7 7 1 7
Others Mediatech Networking Platforms

6 2 5 - 3 3 1
26 10 25 - 11 11 5
Top sectors based on deal volume
Volume 2018 2019 2020

Values USD mn 2018 2019 2020
Expert speak
The deal volumes seem to have

stagnated over the past couple of
years, but the quality of transactions
has certainly put Indian start-ups on
the global podium.
An unprecedented year, COVID-19 shook up the Indian start-up and health tech (49). Together, these sectors constitute ~ 54%
ecosystem like never before. A year that has seen forced and of the total deals consummated in the start-up ecosystem in
in some cases permanent changes in consumer behavior, pre- 2020.
existing business models, expansion plans and fund raising
milestones have been disrupted forcing start-ups to pivot, Despite COVID however, there are green shoots in the Indian
adapt and in some cases, perish. start-up ecosystem that saw the emergence of 11 unicorns in
2020. The frequency at which Indian startups are entering this
Indian start-ups raised USD 5.7 billion in 2020, which was a coveted club of billion-dollar valuation given the steadiness
27% decline as compared with the funding raised in 2019. In and the growth that these businesses have achieved amid the
terms of deal volumes however, the year saw a growth in the COVID-19 pandemic is worth mentioning.
number of transactions consummated with 677 fund raise
transactions being closed in 2020, which was 17% higher than In addition to these, the sector is also seeing a faster recovery
the number of transactions in the same period last year. This in funding and job creation, with both expected to match and
trend was largely attributable to the emergence of many early- surpass pre-COVID numbers.
stage start-ups that have been focused on solving the problems • With tailwinds from the COVID-19 pandemic expected
of the post-COVID ‘new normal’ and have evinced strong continue into 2021, sectors like ed-tech, Fintech, Health
interest from the investor community. Tech, HR Tech, OTT and online gaming are likely to outshine
the market.
While on the one hand early-stage players solving ‘new normal’ • In addition to sectoral trends, finalisation of regulatory
problems drove up deal volume numbers, it was the more changes pertaining to listing norms for start-ups is likely to
evolved businesses/unicorns that attracted the lion’s share be a pivotal event that will impact investor sentiment in this
of investments in 2020 with investors preferring to invest in space in 2021.
mature/stabilised businesses in a year full of uncertainties.
Sectoral trends in this year were largely driven by the degree Aditya Khanna
of disruption caused by COVID on the underlying target Director – Lead Advisory
segments. Accordingly, while sectors including fintech, ed-tech Grant Thornton Advisory Private Limited
and health tech continued to see strong traction and attracted
a majority of the investments in 2020, segments such as travel
faced significant challenges due to COVID and found limited
traction with investors.
Overall, the top sectors which clinched the maximum number of

funding deals in 2020 are fintech and financial services (105),
ed-tech (77), ecommerce/retail (75), enterprise software (58),
Sector spotlight
Sector trends
IT & ITeS
E-commerce
Pharma, healthcare and biotech
Retail and consumer
Banking and financial services
Sector trends
Top sectors based on values Top sectors based on Volumes
Telecom IT & ITeS Start-up Education

19,275 4,394 20,663 6,203 3,388 3,702 597 579 677 37 30 36
Retail and consumer Pharma, healthcare IT & ITeS Energy and natural
5,981 1,731 10,753 and biotech 99 130 103 resources
2,880 4,004 3,442 36 29 30
Energy and natural Banking and financial E-commerce Automotive

resources services 67 74 95 12 20 28
14,107 8,479 6,700 4,684 5,053 3,412
Start-up Infrastructure Pharma, healthcare Media and

5,464 7,857 5,710 management and biotech entertainment
1,728 2,989 2,578 59 77 63 46 39 25
Real estate Transport and logistics Retail and consumer Telecom

3,304 2,706 5,076 318 512 2,446 63 55 55 7 5 21
Manufacturing Education Banking and financial Professional/Business

16,638 8,649 4,727 841 1,003 1,266 services services
79 71 49 25 18 18
E-commerce Automotive Manufacturing

18,929 4,287 4,504 475 790 1,195 54 44 39
2018 2019 2020 2018 2019 2020
Reliance Industries Limited’s Jio Platform raised USD 20 billion phase witnessed a steady uptick in the retail and consumer,
across 18 funding rounds in four months during the pandemic. banking, manufacturing, and education against the hospitality
These rounds drove the telecom sector’s contribution of 27% and leisure, travel, and tourism sectors, which were worst
to the total deal values in 2020. This was followed by another affected during the year. The real estate sector also witnessed
spree of investments in Reliance Retail, through which the many big-ticket consolidations and buyout deals on the
company raised USD 6.4 billion across 9 investments. It drove account of idle land, delays in project completion, and high
the retail sector values during the year to USD 10.8 billion. maintenance costs and debt. The oil and gas, logistics and
warehousing, clean and infra segments also remained active
While the pandemic resulted in declining activity across various pushing the deal activity. Consolidations were also witnessed
sectors, it encouraged digitalization and other disruptive across sectors to establish a stronger footprint, strengthen
technological megatrends, such as advanced analytics, capabilities, enhance balance sheet, to pare debt, and to
artificial intelligence, automation, and big data. These saw a withstand stiff competition, and survive in the new normal.
surge in deal activity in the start-up and IT sectors. The unlock
IT & ITES
Year-on-year deal trend
84 20 38 18 36 33
12 5 9 3 9 5
6.0 5.6 90
82 80
5.0
70
Values USD bn
67
4.0 60
Volumes
48 50
3.0
40
31 32
2.0 1.7 1.7 30
1.4 24
18 11 1.0 20
1.0 0.7 0.6 11
0.2 8 10
0.2 0.2
0.0 -
2018 2019 Q1 '20 Q2 '20 H2 '20 2018 2019 Q1 '20 Q2 '20 H2 '20
M&A PE
Average deal size USD mn Values USD bn Volumes
Sub-sector classification
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2018 2019 2020 2018 2019 2020
Total Volumes Total Values
BPO/KPO Cloud Technology Data Analytics & Big Data & AI Electronic Equipments IT Solutions Mobile VAS Software Development Others
Top M&A deals

The top deals accounted for 70% of the total sector deal values
Acquirer Target Sub sector % stake USD mn
Clarivate Analytics Plc Piramal Enterprise Ltd.- Decision Data analytics and big data 100% 950
Resources Group and AI
Infosys Ltd. Simplus- Outbox Systems Inc. IT solutions 100% 250
Equinix Inc. GPX India Pvt. Ltd. IT solutions 100% 161
Infosys Ltd. Blue Acorn iCi Group IT solutions 100% 125
HCL Technologies Ltd. DWS Ltd. IT solutions 100% 119
Top PE deals
Investor Investee Sub sector % stake USD mn
Thoma Bravo, L. P Majesco ltd- Majesco Software development 74% 421

USA
The Carlyle Group Inc. Nxtra Data Limited IT solutions 25% 235
Insight Partners, CRV and Nexus Venture Partners Postdot Technologies Software development N.A. 150
Pvt Ltd- Postman
GIC, Sequoia India, Ribbit Capital, Tiger Global, Y Razorpay Software Software development N.A. 100
Combinator and Matrix Partners Pvt Ltd
SoftBank Vision 2 fund, Norwest Venture Partners, Canaan MindTickle Inc Software development N.A. 100
Partners, NewView Capital and Qualcomm Ventures.
Expert speak
The merger and acquisition (M&A) deal volume declined 27% virtual world, however, there was a slowdown due to strategic
in 2020, compared with 2019. The value increased 38% due rethinking/realignment to changing market situation. The
to one large deal of USD 950 million in the data analytics/ recovery from such a temporary slowdown was quick as the
artificial intelligence (AI) space. The M&A activity was high pandemic acted as an accelerator for the changes, which
in the IT solutions space indicating the continued focus by were underway such as migration to the cloud, demand for
corporates on digital transformation assets to shore up their data centers, digitalisation of businesses. Many companies
capabilities. adopted emerging technologies such as advanced analytics,
AI, automation and big data. Therefore, the deal environment is
The PE deal volume fell 10% in 2020, but the value declined by likely to transform due to these disruptive trends. We expect the
more than 19% as there was only one large deal valued deal activity to go up in both M&A and PE space in 2021.
at USD 150 million in the first half (H1) of 2020 due to the
COVID-19 pandemic. However, H2 2020 witnessed four large
deals; mostly in the software development space (largest being
USD 421-million deal) as the interest in cloud-based or software Shanthi Vijetha
as a service offering continues. Partner
The impact of lockdown on the deal process was limited
as the industries were already making investments in the
E-commerce
Year-on-year trend
704 41 132 47 64 36
18.0 16.9 4 4 2 4 15 10 60
16.0
50
14.0 43 54
12.0 35 40
Volumes
10.0
USD bn
28 30
8.0 24
20 21
6.0 20
4.0 3.5
7 2.0 1.7 10
2.0 3 1 1.2 1.0
0.8 0.3
0.2 0.0
0.0 -
2018 2019 Q1 '20 Q2 '20 H2 '20 2018 2019 Q1 '20 Q2 '20 H2 '20
M&A PE
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2018 2019 2020 2018 2019 2020
Retail Fin Tech Travel, Transport & Logistics Food Tech Discovery platform Health Tech Others
Top M&A deals

Acquirer Target Sub Sectors Sector % stake USD mn
Walmart Inc. Flipkart Online Services Pvt. Ltd. Retail E-commerce N.A. 1,200
PayU Payments Private Limited Paysense Services India Pvt. Ltd. Fintech E-commerce N.A. 185
Reliance Retail Ventures Ltd. Urban Ladder Home Decor Solutions Retail E-commerce 96% 25
Pvt. Ltd.
Hindustan Media Ventures Ltd. One MobiKwik Systems Pvt. Ltd. Fintech E-commerce N.A. 6
Mahindra First Choice Wheels Fifth Gear Ventures Ltd. - carandbike. Discovery platform E-commerce 100% 4
Ltd com
Top PE deals
Investor Investee Sub Sectors USD mn % stake
Softbank and RA Hospitality Oravel Stays Pvt. Ltd. - OYORooms.com Travel, transport and 807 N.A.
Holdings logistics
Softbank’s Vision Fund BrainBees Solutions Pvt ltd - Firstcry Retail 296 N.A.
Partners Group Ecom Express Pvt. Ltd. Travel, transport and 250 N.A.
logistics
Luxor Capital Group LP, Kora Zomato Media Pvt Ltd Food tech 195 N.A.
Management LP, Mirae Asset
Naver Asia Growth Investment
Pte Ltd, Steadview Capital, Bow
Wave Capital Management LP
and Baillie Gifford & Co.
Tiger Global Management LLC Zomato Media Pvt Ltd Food tech 160 N.A.
& Temasek Holdings
Expert speak
The e-commerce sector in India has had a mixed year. The (accounting for 7 of the top 10 PE deals in foodtech in India).
PE deals grew from 43 in 2018 to 84 in 2020, while the M&A Restrictions on dine-out options, lack of available cooks and
deals fell from 24 in 2018 to 11 deals in 2020. The average PE WFH were key drivers for foodtech with limited impact on food
deal-size in e-commerce reduced by 43% over 2019, showing delivery as compared with other retail which led to an ~80%
cautious investor sentiment in a market characterised by a high reduction in deals in retail.
cash burn rate, inability to find the right product-market fit and
a tough road to profitability. Outlook for FY21
An evident COVID-19 impact on PE deal-making was depicted The e-commerce market in India is less than 5% of China’s but
by muted deal activity. 2020 started spectacularly, registering is growing at ~20% annually. Its growth accelerated because
deals over USD 1.7 bn in Q1 itself with large deals in Food tech, of the disruption caused by the pandemic. These could be the
retail and travel, transport and logistics led by Zomato, Firstcry top driving trends for the market in FY21:
and Oyo Rooms, respectively. However, the deal value in Q2 1 Omni-channel selling will become a norm
and Q3 combined accounted for less than 22% of all deals in 2 Online buying will not be restricted to B2C
2020 and overall, the sector values were 12% lower than in the 3 Increasing number of companies focusing on reaching
same period last year. directly to consumers (88% growth over 2019)
4 Decreasing shipment returns to improve profitability (15%
On the M&A front, 2020 was stronger than 2019. The top deal reduction over 2019)
of the year i.e. Walmart - Flipkart deal (Additional fund infusion 5 High-growth in Tier III cities (53% growth over 2019)
by Walmart in Flipkart) accounted for 83% of the deal activity 6 New categories growing at a rapid pace (beauty and
by value for 2020, while the top 2019 deal of the year Hyundai- wellness growing at 130% annually)
Ola Cabs accounted for 37% of the overall 2019 deal activity,
demonstrating a more broad-based deal activity in 2019.
PE deal drivers in 2020 Alok Verma

Partner
The fintech sector, which was the key sector in 2019 by deal
value, was replaced by foodtech in 2020. Deals in this sector
accounted for nearly two-thirds of all deals due to the growing
penetration of food delivery companies – Zomato and Swiggy
Pharma, healthcare and
biotech
Year-on-year trend
46 56 34 52 46 76
5 6 4 5 5 9
3.0 50
46 2.6 45
2.5 40
2.0 35 35
31
1.7
Volumes
30
USD bn
1.6
1.5 1.3 1.4 25
24
20
1.0 16 15
10 14
8 0.5 0.5 10
0.5 0.3 0.2 9
0.2 6 5
0.0 -
2018 2019 Q1 '20 Q2 '20 H2 '20 2018 2019 Q1 '20 Q2 '20 H2 '20
M&A PE

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2018 2019 2020 2018 2019 2020
Hospitals Medical Devices Pharma & Biotech Primary Healthcare Others
Top M&A deals

Manipal Health Enterprises Ltd. Columbia Asia Hospitals Pvt. Hospitals 100% 284
Ltd.
Dr Reddy's Laboratories Ltd. Wockhardt Ltd’s generics drug Pharma and biotech 100% 260
business in India and a few
other countries
Novavax Inc. Serum Institute of India Pvt. Pharma and biotech 100% 167
Ltd.- Praha Vaccines a.s.
ZNZ Pharma 2 Ltd. Celon Laboratories Private Pharma and biotech 74% 75
Limited
Taikisha Ltd. Nicomac Clean Rooms Far Pharma and biotech 74% 43
East LLP
Top PE deals
New Mountain Capital Aurobindo Pharma Ltd. - Natrol Pharma and biotech 100% 550
Inc.
The Carlyle Group Inc. Piramal Enterprises Ltd- Pharma and biotech 20% 490
Piramal Pharma Ltd
KKR & Co. Inc JB Chemicals & Pharma and biotech 54% 409
Pharmaceuticals Ltd
The Carlyle Group SeQuent Scientific Ltd Pharma and biotech 74% 210
Goldman Sachs Biocon Biologics India Limited Pharma and biotech N.A. 150
Expert speak
The markets are making a significant effort to mitigate the The PE industry continues to have a deep interest in the
impact of the pandemic and the domestic businesses have competence and quality of the Indian pharma and healthcare
shown positive signs of revival during the second half of the space and India continues to be a preferred investment
year. The pandemic has provided the impetus to the adoption hotspot.
of innovative, cost-effective and alternative business models.
The Indian pharma and med-tech businesses have been very The M&A and PE outlook for 2021 will remain guarded. The
swift to adapt to the demands of the domestic and global market envisages companies and investors reorienting their
market as the countries across the world are planning to avert strategies to attaining self-sufficiency through a strategic
dependencies of raw material supplies and production from partnership to ensure an uninterrupted supply line in the
China. changing world order. With the pandemic impacting the
financial performance and thereby affecting the business
Indian pharma companies like Bharat Biotech, Serum Institute, and capex expansion valuation outlook, the investors will
Biologica E, Zydus Cadila, Panacea Biotec and Indian continue to be in wait and watch mode from both investment
Immunological, which are at the forefront of developing and exit perspective. The government and industry are making
the vaccines will auger well for investments into the drug significant efforts in strengthening various corridors of growth,
development, drug discovery and research sector in India. which should result in positive deal sentiments in the market.
India’s pharma sector has now emerged as preferred
manufacturing and development hot-spot that may lead to
more investment and deal activities in the year 2021.
Santhosh C
But the hospital sector needs a turnaround. The pandemic has Director
impacted hospital bed occupancy, surgeries and procedures Grant Thornton Bharat LLP
and the inflow of foreign patients. Nevertheless, the sector also
saw one of the largest deals in the Indian healthcare space,
when Manipal Hospitals acquired Columbia Asia Hospital
chain in India, making it one of the largest chains in India.
Retail and consumer
Year-on-year trend
212 47 192 18 13 198
2 4 4 3 1 9
7.0 40
38 6.4
6.0 35
5.3
30 30
5.0
25 25 25
3.8
Volumes
4.0
USD bn
20 20
3.0
15
13
2.0
1.4 9 10
5
1.0 0.4 0.7 5
4 0.3 4
0.0 0.1 0.1
0.0 -
2018 2019 Q1 '20 Q2 '20 H2 '20 2018 2019 Q1 '20 Q2 '20 H2 '20
M&A PE

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2018 2019 2020 2018 2019 2020
FMCG Retail Consumer Durables Consumer Services Food Processing & Distribution
Top M&A deals

Reliance Retail Ventures Ltd. The Future Group- Retail and Wholesale business and Retail 100% 3,295
the Logistics & Warehousing business
Hindustan Unilever Ltd. GlaxoSmithKline Consumer Healthcare Limited- FMCG 100% 412
Horlicks India
Flipkart Online Services Pvt. Ltd. Aditya Birla Fashion and Retail Ltd Retail 8% 203
MTR Foods Pvt. Ltd. Eastern Condiments Pvt Ltd FMCG 68% 181
Walmart Inc- Flipkart Online Arvind Youth Brands Pvt. Ltd- Flying Machine brand Retail 27% 34
Services Pvt. Ltd.
Top PE deals
Public Investment Fund, Silver Lake, Mubadala, Abu Reliance Retail Ventures Ltd. Retail 10.5% 6,364
Dhabi Investment Authority, GIC, KKR, General Atlantic,
TPG
Sequoia India, Sofina, Sixth Sense Ventures, Neoplux and B9 Beverages Pvt. Ltd.- Bira 91 FMCG N.A. 30
family offices
International Finance Corporation Future Lifestyle Fashions Ltd. Retail N.A. 30
A91 Partners Pushp (Brand) India Pvt. Ltd. FMCG N.A. 16

Faering Capital, Trifecta Capital and Unilever Ventures Pureplay Skin Sciences (India) FMCG N.A. 15
Pvt. Ltd.- Plum
Expert speak
The unprecedented times have forced humankind to innovate e-commerce penetration is encouraging businesses to reduce
and adapt. From the organisation structure, product offering, their cost of operations by giving up or reducing leased retail
supply chain, promotion and advertising to point of sale, all points and increasing market reach through digital means. This
business operations that were stable until 2019, have now move will also attract financial investors as companies increase
undergone significant change. India’s digital mission, coupled their market share and improve their financial performance.
with the impetus on financial inclusion, enabled the companies
and consumers to swiftly adapt to the new technologies. As a
result, the retail and consumer sectors are well poised to grow
in the coming years.
With supply chains and distribution channels easing out, it is Rahul Kapur
expected that the sector will see many new regional brands Partner
emerging across categories. The food and consumer packaged Grant Thornton Bharat LLP
goods (FMCG) segment is likely to see many transactions
with small businesses either making big or being acquired
by national or international brands. The ever-increasing
Banking and financial
services
Year-on-year trend
83 56 85 42 82 59
4.0 6 5 3 10 12 11 50
46 45
3.5 3.4
41 40
3.0 2.7
33 35
2.5 30 30
Volumes
USD bn
2.0 1.9 25
1.7
1.5 1.4 20
1.1 15
1.0 13 13
10 10
0.5
0.5 5 6 5
0.1 0.2 0.1
2
0.0 -
2018 2019 Q1 '20 Q2 '20 H2 '20 2018 2019 Q1 '20 Q2 '20 H2 '20
M&A PE
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2018 2019 2020 2018 2019 2020
Financial Services NBFC Insurance & TPAs Banking Others Mutual Funds
Top M&A deals

Acquirer Target Sub-sector % stake USD mn
SBI, HDFC, ICICI Bank Limited, Axis YES Bank Ltd. Banking N.A. 1,389
Bank Limited, Kotak Mahindra Bank
Limited, The Federal Bank Ltd, Bandhan
Bank Limited, IDFC First Bank Limited
Nexon Co. Ltd. DMI Finance Pvt. Ltd. NBFC N.A. 123
Federal Bank Ltd. IDBI Federal Life Insurance Company Ltd. Insurance & TPAs 23% 67
QORQL Pvt. Ltd. Raheja QBE General Insurance Company Ltd. Insurance & TPAs 100% 38
Navi Technologies DHFL General Insurance Limited Insurance & TPAs 100% 14
Top PE deals
Investor Investee Sub-sector % stake USD mn
PAG Edelweiss Wealth Management Financial services 51% 300
Baring PE Asia, ICICI Prudential Life RBL Bank Ltd. Banking 19.5% 210
Insurance Co. Ltd., Gaja Capital and CDC
Group
Brookfield Asset Management IndoStar Capital Finance Limited NBFC 40% 204
TA Associates National Stock Exchange of India Limited Financial services 2% 150

Warburg Pincus LLC-Orange Clove Home First Finance Company India Pvt. Banking 25% 95
Investments BV Ltd.
Expert speak
2020 was a dynamic year for the Indian banking sector. The
pandemic is reshaping the banking industry by accelerating
General insurance
digitalisation, reducing growth in traditional banking products The general insurance (GI) companies have reported gross
and altering the way the banks work, including a significant premiums of INR 1.9 trillion in FY20 (growth of ~11.2% as
shift in the role of branches. compared to FY19). Further, premiums in FY21 have reached
INR 1.1 trillion (YTD October 20), recording a muted growth at
The banks played a crucial role in stabilising the economy and 1.1% compared to the corresponding period in FY20, mainly
transmitting government stimulus and relief programmes. The due to the impact of COVID-19 – the growth being mainly
pandemic enhanced the focus on increasing capital resilience driven by commercial and health insurance segments. On the
and upgrading technological infrastructure. other hand, automobile and travel insurance segments had
been the most severely impacted segments within the sector.
Relaxations:
There have been some significant changes in the industry, such
• Moratorium for 6 months ending 31 August 2020 for eligible
as the launch of new products like COVID-specific insurance
borrowers to pay principal and interest with relaxation
plans and increased digitalisation resulting from a focus
on their classification as a non-performing asset or a
on virtual interface and work from home model. The digital
restructured asset
transformation has posed several new challenges in terms of
• A scheme announced for grant of ex-gratia payment of the
increased cyber risk and vulnerability of the existing business
difference between compound interest and simple interest
continuity plans of the companies. There have also been
for the period 1 March 2020 to 31 August 2020
several regulatory measures announced by the government in
• Reduction of cash reserve ratio (CRR) by 100 basis points to
the wake of the pandemic, which includes, inter alia, extension
3% of NDTL
of due dates for renewal premium for health and motor policies
• Requirement of minimum daily CRR requirement reduced
and extension of timelines for regulatory filings and returns.
from 90% to 80%
• Policy repo rate reduced under the LAF from 5.15% to 4.00%
• Credit facility to MSME borrowers under GOI announced
Broking
Emergency Credit Line Guarantee Scheme (ECLGC) As the Sensex rose from 29,468 points in March 2020 to 45,000
• Resolution framework on COVID-19 related stress for eligible points and above by December 2020, there has been an
loans. increase in the brokerage business as well as a strong surge in
retail client addition. There has been a rise in brokerage income
The road ahead: in July and August as compared to previous months. However,
due to the implementation of new Securities and Exchange
The industry needs focused regulatory supervision, monitoring
Board of India (SEBI) guidelines with respect to marginal
of the lending institutions and timely intervention by the
requirement in cash segment and pledging of client shares,
Reserve Bank of India.
there have been some operational hassles, which resulted in
The long-term implications of the pandemic for the Indian the reduction of trade volumes. Hence, there has been a slight
financial services sector are uncertain. The Banks, in the short reduction in brokerage income towards the end of the third
to medium term, can expect to see a reduced off-take of loans, quarter by 15-20%. The SEBI circular will ensure mitigation of
lower interest rates which will be offset by lower cost of funds the risk of misappropriation or misuse of the client’s securities
and increase in credit losses. available with the broker.
The banks required to automate IRAC norms by 30 June 2021.
Asset management The insurance industry has significantly scaled-up with
digital platforms (both internal and customer-facing) and
The asset management industry in India comprises mutual as lockdowns are getting relaxed, the ability/willingness to
funds (MFs), portfolio management services, alternative do medical-tests before underwriting of insurance has also
investment funds, private equity funds, etc. The MF and asset improved. The pandemic has also induced people to consider
management companies (AMC) are closely regulated by SEBI. the option to take life insurance which will be medium-long-term
In the past few years, certain regulations have significantly positive for life insurers.
impacted the AMC businesses, such as the circular on the ban
of upfront commission to MF distributors, the circular on the Historically, the private insurers have been highly focused on
separation of expenses between MF and AMC, etc. ULIP, a segment where they did not compete head-on with LIC.
However, insurers are now focusing on building up non-ULIPs
According to the data from the Association of Mutual Funds in savings businesses, especially PAR products, which has been a
India (AMFI), new MF distributor registrations have witnessed a forte of Life Insurance Corporation (LIC).
sharp fall of 51%. The industry added 8,594 new independent
MF distributors in FY20 as against 17,625 new registrations a To drive growth in this segment, private insurers have been
year ago due to a ban on the upfront commission as per the ramping-up their agency force including lateral recruitment
SEBI circular of September 2020. from LIC’s agent force. The non-PAR business entails
guaranteed returns from the insurers and in the recent years,
Management fees earned by the AMCs have been reduced they have leveraged on latent demand for such products
in the first 6 months of FY20 due to a fall in the stock market and hedged their risks through a combination of partly
because of the pandemic, which has affected the underlying paid debentures of highly-arated corporates, long-term
asset under management (AUM), on which AMCs earn government bonds (up to 30 years) and hedging instruments
the management fees. The stock markets have been on a like forwarding rate agreements (FRA) that help to ramp up this
significant recovery trend after the lifting of the lockdowns product. A more balanced product mix will help reduce volatility
by the central/state governments and the future seems to be in premium growth for private insurers.
brighter.
The first half of FY21 saw stronger growth in protection
premiums (especially in 1Q) because of uncertainties related
Mutual funds to the pandemic and a stronger push by distribution partners
Cooperative credit policy stance, continuous global liquidity to sell protection products before the expected price increase
flows and positive GDP growth forecast has led to Indian (due to an increase in reinsurance rates). In Q1FY21, the
mutual fund industry AUMs stroking the highest ever ₹30 lakh sum-assured-to-premium ratio for the industry (and for most
crore benchmark. The equity-oriented mutual funds have players) spiked, before normalising in 2Q. As there was a sharp
witnessed a massive outflow in November, as investors booked decline in premiums of other products such as ULIPs, this
profit amid higher market valuations. Despite the outflow, the increase can also be attributable to changes in the product
AUM of the industry reached a record ₹30 lakh crore at the mix. As a result, the share of protection in total APE (annual
end of November. The events in the fixed income space which premium equivalent) increased for almost all insurers.
started with the IL&FS default, followed by DHFL and Franklin The growth seems to have moderated slightly in 2QFY21 vs.
Templeton, where the fund house shuttered six of its debt 1QFY21; we believe this is largely on account of the front
mutual fund schemes, have led investors to seek safety in loading of protection policies in 1Q before the expected
bank-backed fund house. It is also significant to note that there increase in pricing. We believe that demand for protection
is healthy addition of 3.39 lakh systematic investment plans. business will remain strong over the medium to long term, given
the opportunity size.
Life insurance industry
The life insurance business in India has been largely dominated
by savings products (ULIPs), evident from new business
premium growth being correlated more closely to equity market
performance, rather than GDP growth. However, in the recent
period, the product mix for private players has been shifting Khushroo B. Panthaky
towards a more conventional business such as non-par Chartered Accountant
(non-participating) savings and protection; this is because of Mumbai
the high volatility in the markets, increased awareness due to
the pandemic, and a lower interest rate environment.
Sectors attracting
big-ticket deals
Telecom
Energy and natural resources
Manufacturing
Telecom
2,754 12 1,352 - 2,179 757

25.0 12
5 - 3 - 2 12
19.3 10 10
20.0
8
15.0 7
6
USD bn
Volumes
5 9.5
10.0
3 4
3
5.7 5.1
5.0
5.0 4.4
1 2 2 2
0.0 0.4
0.0 -
2018 2019 Q1 '20 Q2 '20 H2 '20 2018 2019 Q1 '20 Q2 '20 H2 '20
M&A PE
Expert speak
As the global economy continues to reel from the impact of the India, with a subscriber base of over 1.2 billion, is home to one of
COVID-19 pandemic, work from home and social distancing the world’s largest internet consumer base, which encapsulates
have become the buzzwords in today’s business landscape, with the enormous growth potential of the sector and is evident
the telecom sector playing an important role driving this shift. from the huge investment that the sector has attracted. In April
Remote working, videoconferencing and telecommunications 2020, Facebook’s investment of USD 5.7 billion in Jio Platforms
technology have quickly emerged as key enablers for business of Reliance Jio is the largest FDI in the technology sector in
operations during this lockdown, which is expected to increase India. Subsequently, major global investors (including Google,
the demand for telecom services. Therefore, as per some KKR, Vista, etc) invested in Jio Platforms for a total amount of
reports, the industry is expected to grow by 15-20% amid the approximately USD 20 billion against 33% stake. BAL has also
economic slowdown. The improvement in BSE Telecom index by been able to attract investments from 15 top global PE houses
approximately 13% between December 19 and now is in line during 2020 via QIP route. The recent inflow of investments,
with the improvement in overall market indices. Further, valuation which Jio has attracted, pandemic driven increased usage of
multiples of the major listed telecom players – Vodafone data and technology as well as industry consolidation leading
Idea Limited (VIL) and Bharti Airtel Limited (BAL) have seen a to a three player market emerging in India are the factors, which
significant increase during the same period. Some of the key bode well for the future of the Indian telecom sector.
developments in the industry during calendar year 2020 are:
• The Supreme Court directed the Telcos for the adjusted gross
revenue (AGR) payment in 10 years; however, they have to
pay 10% of the amount by March 2021
Manish Saxena
• Reliance Jio becomes net debt-free ahead of schedule by
Partner
selling ~33% stake to major global players
• DOT bans Chinese equipment vendors in the BSNL 4G tender
Energy and natural resources
645 252 344 109 358 103
11 11 10 8 7 5
14.0 19 20
18
12.2 17 18
12.0
16
10.0 14
11 12
Volumes
USD bn
8.0
10
8
6.0 7 8
4.5
3.9 5
4.0 6
4 2.9
3 3 4
1.7 1.9
2.0
0.6 0.7 2
0.4 0.4
0.0 -
2018 2019 Q1 '20 Q2 '20 H2 '20 2018 2019 Q1 '20 Q2 '20 H2 '20
M&A PE
Expert speak
Most of the constituent business in this sector are seeing PE investment is expected to improve in the coming year post
normalcy being restored and some of them reaching the economic revival. Power and refining segments have again
pre-COVID lockdown levels of action and business. Power been the flag bearers in terms of the largest deal even if one
consumption has not come back to the pre-COVID level peaks were to exclude the USD 1.5 billion acquisition of a technology
yet, whereas the oil and petroleum products have seen good company by Haldia in the oil, gas and refining space. The trend
turnaround in offtake. In the mining segment, the relaxation has been the same in relation to PE investments while oil and
of policies in the coal sector has not led to any positive gas has not garnered any investments from this community.
outcome. The auctions have been deferred or extended for a Power has been the top drawer followed by clean tech.
few months with the expectation of revived interest. The focus
simultaneously is increasingly on clean tech. With electric
vehicles being the hot topic globally, there is incremental focus
on this segment of power and energy.
M&A transactions in the year have been active with a number Sridhar V
of deals equaling 2019 while on value terms, they have been Partner
fairly high despite the pandemic. However, PE deals have Grant Thornton Bharat LLP
been muted despite increased number of transactions. The
Manufacturing
Year-on-year trend
373 219 75 54 77 254
18 5 7 4 2 4
18.0 50
16.0
16.0 45
43
14.0 40
37
35
12.0
Volumes
USD bn
30
10.0
8.1 25
8.0
20
6.0 15
11 15
4.0 10 7 10
2.2 7
2.0 1.2 0.9 5
4 0.6 0.5 0.4
0.0 0.0 1 2
0.0 -
2018 2019 Q1 '20 Q2 '20 H2 '20 2018 2019 Q1 '20 Q2 '20 H2 '20
M&A PE
Expert speak
Manufacturing remains one of the key focus sectors for the Despite the continued slowdown, the government’s endeavour
government. In addition to the successful Make in India and to promote industry and create 100 million new jobs by 2022
National Manufacturing Policy campaigns, the government by promoting foreign investments, start-ups, tax rebates, ease
continues to deliver initiatives to promote the manufacturing of doing business, etc. can help achieve its vision of positioning
industry. For example, PLI scheme, increased FDI under India as a manufacturing hub of the world. Going forward,
automatic route in defence manufacturing from 49% to 74%. sunrise sectors such as renewable energy, electric vehicles,
These initiatives haveIndia’s manufacturing sector an attractive climate tech and transformation of the manufacturing sector
destination for foreign investments. through artificial intelligence and machine learning can be
expected to drive sector related deals.
However, deal activity in the manufacturing space continued
to decline and remained at USD 4.7 billion in 2020. The deal
activity in 2020 also registered a de-growth on an annualised
basis, continuing the trend from 2019. In addition to the global
economic slowdown witnessed in 2019, the disruption in global Gautam Dayaldasani
production and economic activities due to lockdown triggered Director
by the COVID-19 pandemic through 2020, amplified the Grant Thornton Bharat LLP
adverse effects on demand and supply sides of the industry.
Consequently, deal activity in 2020 fell short of 2019 levels
both in terms of value and volume of domestic and cross-border
transactions.
Our Corporate Finance practice comprises 100 senior
multi-faceted specialists experienced in providing
end-to-end solutions
Abhay Anand Alok Verma Anirudh Gupta Ashish Chhawchharia Darshana Kadakia
Dinesh Anand Dhanraj Bhagat Manish Saxena Prashant Mehra Rahul Kapur
Raja Lahiri Saurabh Srivastava Shanthi Vijetha Siddhartha Nigam Sridhar R
Sridhar V Sumeet Abrol Vikarth Kumar Vishesh C Chandiok
Aditya Khanna Amit Bora Arpit Thakkar Bimal Agarwal Gautam Dayaldasani
Kuresh Khambati Meghna Bansal Pankaj Chopda Rajan Shah Santhosh Chandrasekaran
Karishma Kukreja
Marquee credentials
Select transaction advisory credentials
Tech Mahindra GE Capital JSW Cement JSW Infrastructure
Financial and Financial and Financial and Financial and

tax due diligence tax due diligence tax due diligence tax due diligence
GMR Caryle Cipla Wipro
Reverse Merger of Indonesian Financial and Cross Border Acquisition Financial and
asset with UFS, Singapore tax due diligence of South Africa based tax due diligence
Cipla Medpro
Future Retail Abraaj Tech Mahindra Capital First
Target is
Confidential
Financial and Acquisition of controlling Financial and

tax due diligence stake in Care Hospitals tax due diligence Strategic acquisition
eClerx Services Limited Redington Zen3 Logwell
Acquired
Roop Automotive Ltd
Logwell Forge Ltd
Financial and
tax due diligence Acquisition Vendor Assist Acquisition
Intellicar Mystair Senses Pharma Tech Mahindra
Strategic acquisition
Acquisition Acquisition Investment of Born group
AION Vatika Harvest Gold Luminous
Plutus
Financials
Private equity investment Private equity investment Acquired Majority Investment in Luminous
stake in Harvest Gold
Hi-Tech Micromax Micromax Sutures India
Integrated Asset
Management
Leveraged Buyout of
Teutech with acquisition
financing by Integrated
Asset Management Investment in Micromax Investment in Micromax Private Equity Investment
BD Parenting Infotech
Matrix Livguard Matrimony.com Limited
Private Limited
Acquisition of Minority stake

Investment in Matrix Private Equity Investment in Astro-Vision Private Equity Investment
Webklipper Technologies 99 Algorithms
WoodenStreet Furnitures
Private Limited Private Limited
Financial Due Diligence for

debt transaction in a
Residential real estate
Vendor Due Diligence Vendor Due Diligence Vendor Due Diligence
Project in Rewari, Haryana
Wipro Singularity Automation Tata Global beverages
Investment in LetsShave
Private Limited Private Equity investment Acquisition Acquisition
Mahindra and Mahindra
Financial and Tax

Acquisition due diligence
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Deals

Annual Dealtracker 2021 Consolidation

M&A and private equity deal insights

16th annual edition

Deal snapshot 2020 08

Mergers and acquisitions dealscape 16

Regulatory and economic outlook 38

Private equity dealscape 50

Sectors attracting big-ticket deals 82

Dealtracker editorial team

Our methodology for the classification of deal type is as follows:

With underlying uncertainties, the overall deal

Deal summary Volume Value (USD mn)

1 While the unprecedented turbulence

3 M&A deals jumped 33% to USD 36.9

10 While the Covid phase resulted in

CCI IBC case In a move Vertical A move into

Notable deals that fell apart in 2020

Breach of agreement Impact of COVID-19

Values USD bn Volumes

10% 33% 34%

Issue Size USD bn Volumes

Sector trend - 2020

Vedanta Ltd- Rosneft PJSC, Idea-Vodafone Walmart- ArcelorMittal- Facebook-Jio

2016 2017 2018 2019 2020

Energy and Energy and Telecom Telecom Manufacturing Telecom

natural natural (62%) (22%) (29%) (29%)

Start-up Start-up Start-up Start-up IT & ITeS Start-up

Greenoaks Capital, Reliance Infratel

25.0 22.7 700

2016 2017 2018 2019 2020

Start-up Start-up Ecommerce Start-up Start-up Telecom

(31%) (17%) (29%) (23%) (17%) (24%)

Start-up Start-up Start-up Start-up Start-up Start-up

788 2,584 1,097 5,619 1,663 2,300 1,627 2,566 1,089

Energy and natural Banking and Retail and

Media and Professional/ Infrastructure

Aerospace and Agriculture and Transport and

Top sectors based on deal volumes

576 551 41 Values USD mn 2018 2019 2020

UltraTech Ce- Idea-Vodafone Bharti Infratel- ArcelorMittal- Reliance Retail-

45.0 161 162 41.2 180

2016 2017 2018 2019 2020

Manufacturing Telecom Telecom Manufacturing Retail and consumer

(37%) (74%) (36%) (43%) (24%)

Start-up Start-up Start-up Start-up Start-up

The complete lockdown across the country slowed down the

E-commerce Media and Automotive Professional/ Transport and Aerospace and

Agriculture Hospitality and Telecom Education Energy and Infrastructure

Pharma, healthcare IT & ITeS Manufacturing E-commerce Media and Automotive

Professional/ Hospitality and Energy and Infrastructure Start-up Banking and

Retail and Transport and Aerospace and Agriculture Telecom Education

Top cities based on target destinations

89 deals 86 deals 101 deals 95 deals 66 deals

USD 20.7 bn USD 6 bn USD 25.7 bn USD 7.9 bn USD 18.1 bn

Rosneft PJSC, RA Hospitality Facebook Inc-Jio

2016 2017 2018 2019 2020

Energy & E-commerce E-commerce Start-up Telecom

Natural (29%) (65%) (29%) (56%)

Start-up IT & ITES IT & ITES IT & ITES IT & ITES