Wall Street biggies not in top-5 M&A advisers

The Kremlin-backed Russian giant Rosneft's $12.9-billion acquisition of

Essar Oil

kept Wall Street banks out of the top-five list of dealmakers -a rare occurrence in the Indian M&A sweepstakes of late. The Rosneft deal so heavily influenced the list of top rainmakers that four among the top five were involved with this transaction, Bloomberg data showed. The Wall Street investment banks, which dominated the M&A scene in the last decade, had to sit out as Rosneft faced US economic sanctions in the wake of the 2014 Ukranian crisis.Indian M&A deal value touched $68 billion, surging 85% over the previous year, primarily driven by domestic consolidation moves, according to

Thomson Reuters

figures.

JM Financial, UBS, VTB Capital, Kotak and Arpwood occupied the top five slots in the Bloomberg M&A list by deal value, while Morgan Stanley had a consolatory fifth slot in the Thomson Reuters rankings. India's JM Financial and Arpwood, VTB of Russia and Swiss bank UBS had their names attached to the Rosneft deal with Essar.

JM Financial and Arpwood, which burst into the top charts for the first time, were involved with multiple large deals, besides Rosneft. Veteran dealmaker Rajeev Gupta-spearheaded Arpwood advised LafargeHolcim's $1.4-billion sale of cement unit to Nirma, while Vishal Kampaniled JM Financial figured in domestic consolidation and restructuring deals such as Tata Po wer's acquisition of Welspun Renewables, UltraTech's buyout of Jaypee cement and

Aditya Birla

Nuvo merger with Grasim.

“We see domestic consolidation as a theme gathering steam in the next two years, especially in sectors such as renewables, industrials and cement,“ said Kampani. “Given the overcapacity in several industries, it's becoming a wiser choice for cashrich companies to acquire assets than building up capacities,“ added Kampani, who took charge of JM after his father and iconic banker Nimesh Kampani hung up boots in September this year.

Manisha Girotra, CEO, Moelis & Company India, said, “There's growing realisation that greenfield expansion doesn't come easy . This year belied some myths like Indian companies were not serious about domestic consolidation deals, and often shy away from higher multiples.“ Moelis advised on deals like Orient Cement, part of

C K Birla Group

which bought two cement assets from Jaypee group. “These domestic M&A deals, which involved significant refinancing of bank loans, must be seen in the context of talk about capex cycle not picking up,“ Girotra said, suggesting that a lowcapex environment didn't mean that India Inc was sitting idle.

Kampani and Girotra argued that India's attractiveness as a top FDI destination brought in amore diverse pool of long-term capital. “Big sovereign wealth managers and global pension funds are increasingly vying with strategic suitors to buy asset heavy industries,“ Kampani noted. Girotra said, “ Abraaj Capital's deal with Care Hospitals was the first acquisition deal involving a Middle East investor, while Tenaga's investment in GMR Energy showed interest from diverse geographies like Malaysia.“



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