Look Back 2023: Top Mergers & Acquisitions That Marked A Change In India's Business Landscape

Year Ender 2023: Technology, banking, and e-commerce sectors took the lead, with several high-profile acquisitions redefining the industry landscape

The year 2023 saw a flurry of deals across various sectors, indicating a robust economic revival despite global uncertainties.

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India has witnessed a remarkable surge in mergers and acquisitions (M&A) throughout 2023, marking a transformative period in the country's business landscape. The year 2023 saw a flurry of deals across various sectors, indicating a robust economic revival despite global uncertainties. Technology, banking, and e-commerce sectors took the lead, with several high-profile acquisitions redefining the industry landscape. One of the significant deals involved a leading e-commerce player acquiring a promising start-up in the fintech space, signalling a convergence of digital services.

According to Grant Thortan, Q3 2023 saw stable M&A deal activity, recording 82 deals at $7.7 billion, marking the highest quarterly values in 2023. However, the PE sector recorded its lowest figures, impacting the overall deal activity in Q3 2023. During this period, only 302 deals valued at $13.4 billion were recorded, marking the lowest quarterly volumes in the last three years. The decline in deal volumes and values was primarily due to dwindling investor activity. Large deals made a comeback in Q3 2023, with six megadeals valued over $1 billion, taking the average deal size to $37 million.

Here are some key M&As of 2023

HDFC Merges into HDFC Bank

HDFC Limited has been merged with and into HDFC Bank, and HDFC Limited has stood dissolved without being wound up, without any further act or deed, on July 1, 2023. HDFC Bank and HDFC Ltd. had announced a decision to merge on April 4, 2022, and had indicated a time frame of 15 to 18 months for the process to be concluded.

Govt Acquires Majority Share in Vodafone-Idea

Telecom major Vodafone-Idea (Vi) in February 2023 announced that the central government will acquire 33.4 per cent of shares in the telco. After converting the net present value (NPV) of the interests on the deferred spectrum payments and seeing the gross revenue related dues, the Centre will become the single largest shareholder in the firm. Amount to around Rs 16,133 crores. With the post-allotment shares to the government, the combined stake will be around 50 per cent, as compared to Vi’s co-founders. That is, UK’ Vodafone Ple that holds 31.7 per cent, while the other co-founder Aditya Birla group holds 18.2 per cent of the shares.

Axis Bank Takes Control of Citibank’s Retail Business

Private Indian lender Axis Bank in March 2023 declared that they have completed the acquisition of Citibank’s consumer business and non-banking financial company consumer business. The bank paid about Rs 11,603 crores for the deal. Axis Bank also stated that the payment required to Citibank’s consumer business is based on the closing position of the Citibank’s previous assets, the assets under management and the liabilities. Citibank, officially known as Citibank N.A, is a globally recognized financial institution and a subsidiary of Citigroup Inc. Citibank started its consumer banking business in 1985. Axis Bank is a publicly traded firm listed on the BSE and the NSE.

IDFC First Bank Merger With IDFC Ltd

The board of directors of both IDFC First bank and IDFC Ltd announced their merger in July.  The share exchange ratio between both should be equal to 155 equity of value Rs10 of IDFC bank for every 100 shares of IDFC Ltd. this merger resulted after HDFC Ltd got merged with HDFC Bank for around $40 million in a deal. As a result of the merger the value of per share of the bank would increase by 4.9 per cent. This merger will help simplify the structures of these banks making the process streamline of regulatory compliance.

LIC Stake in Bata

State-run Life Insurance Company (LIC) acquired Footwear Retail company, Bata India Pvt. Ltd. for 108 crore. In March 2023, LIC through open market transactions bought additional shares of 6.88 lakhs equity. This helped the Bata firm to be in the limelight in the entire footwear sector. Also making their stake prices rise from 4.47 per cent to over 5 per cent. There are other shareholders in the Bata circle, HDFC Life insurance company and ICICI Prudential Insurance company also held 2.21 per cent and 1.19 per cent in Bata India as reported in December last year.  In 2022, LIC was listed on the stock exchanges list under the state run insurer launched India’s biggest initial public offering (IPO).

PVR-Inox Merger

PVR Pictures have been renamed as PVR INOX Pictures after a merger between PVR and Inox Leisure. PVR-INOX Ltd has been created after the merger of two leading cinema brands PVR Ltd and INOX Leisure. The merger was effective from February 6, 2023. PVR INOX had said that it has added 168 screens in FY23 between PVR (97 screens) and INOX (71 screens) and 79 screens added in Q4 FY23 between PVR (53 screens) and INOX (26 screens).

Brookfield Asset Management Buys Rostrum Realty

Brookfield Asset Management in May 2023 announced that it had bought a 51 per cent controlling stake in Rostrum Realty Pvt. Ltd.  Rostrum is a real estate joint venture firm, primarily engaged in real estate and property development. The remaining share in the company is held by Sunil Mittal of Bharti Enterprises. Rostrum Realty estate development owns four commercial properties in – Delhi, Gurugram, and Ludhiana. It was previously owned by Bharti Realty, a part of Bharti Enterprises. Brookfield asset also has an operating hand – Brookfield properties that will from now manage the property work. That includes properties like Worldmark Aerocity in Delhi, Pavilion Mall in Ludhiana, and Worldmark 65 and Airtel Centre in Gurugram. The acquisition happened around Rs 50 billion.

Paytm Buys Alibaba Stake

China’s Alibaba sold 3.1 per cent in Indian digital payment firm Paytm through a block deal for a total of $125 million in 2023. Alibaba, which as of September last year held a 6.26 per cent of share in the company, sold it at Rs. 536.95. Paytm the company formally known as One97 communications. The company got listed in 2021, after an IPO (Initial Public Offer) of $2.5 billion. Paytm closed 2022 with a 60 per cent loss. Although this year the company stock has risen up about 9 per cent.

Kotak Mahindra Acquires Sonata Finance

Kotak Mahindra in February 2023, announced that they had acquired Sonata Finance Private Limited in Rs. 537 crore all cash deal. After it Sonata Finance will function as a whole subsidiary of the bank after receiving its regulatories. Kotak officials said that the Sonata Finance Pvt. Ltd. will be providing them with the platform that’ll help them to cater to economically weaker sections and undeserved households in a more efficient commercial manner. Also help them to become a key significant player in the financial inclusion sector.

BSE Sells Stake In Central Depository Services

The BSE via open transactions in June sold its 5 per cent stake to Central Depository Services Ltd (CDSL) for 468 crores. Reportedly the shares were disposed of at an average value of Rs 985.98 each. Making the total transaction value to Rs 467.7 crores.  In February this year, the BSE too sold 2.5 per cent stake in CDSL through an offer for sale route. The BSE provides an interactive and friendly platform for efficient, effective and transparent markets for trading in equity, derivatives, mutual funds, policies, currencies, and debt instruments.

BharatPe Acquired Trillion Loans

BharatPe acquired 51 per cent share in Mumbai-based non financing company (NBFC) Trillion Loans in July. The details of the finances of their deal were not disclosed by either of the two companies. Trillions loans is said to be an easy and user-friendly lending platform. Although after being acquired by BharatPe, trillion loans will still function as an independent entity and will continue to make new connections with other companies in order to enter other sectors too.