Announcement of the general elections triggered caution in the Mergers and Acquisitions (M&A) market, slowing down deals. The value of Indian M&A deals in February slumped 34 per cent to $1.24 billion as against February 2018, according to Grant Thornton.
There were 44 deals compared to 40 a year ago. In January, M&A values fell 85 per cent to $2.3 billion across 36 transactions.
Uncertainty over trade and Brexit, exchange rate volatility and crude price rise were the major worries in January. Pankaj Chopda, director at Grant Thornton India LLP, said the upcoming Lok Sabha elections will deepen the wait-and-watch approach in the deals space and many more deals are expected after the poll verdict in May.
Other investment bankers point out that there is uncertainty in the M&A market in anticipation of policy changes that could come if the ruling party at the Centre changes.