Local firms step up heat on M&A front

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Sheela Foam Ltd’s acquisition of Kurlon Enterprises Ltd, Godrej Consumer Products Ltd’s acquisition of Raymond Consumer Care Ltd, Dabur Ltd’s acquisition of Badshah Masala Pvt. Ltd, Nirma Ltd’s acquisition of Stericon Pharma Pvt. Ltd, and Hinduja’s proposed acquisition of Reliance Capital Ltd.

Torrent is also vying for the Hamied family’s stake sale in Cipla, while Nirma is competing for Glenmark Life Sciences Ltd. “Of particular interest is the emerging trend where, in numerous instances, domestic conglomerates are showcasing their formidable capabilities by outpacing well-established private equity firms in the competitive pursuit of coveted assets. This trend underscores the growing dominance of these larger corporates in the market," said Manisha Girotra, chief executive of Moelis India.

However, this does not mean PE firms have taken the back seat; some of the recent large control transactions include Baring PE Asia EQT’s separate deals in fertility chain Indira IVF Hospital and education financing firm Credila Financial Services Pvt. Ltd, as well as Blackstone Group’s purchase of Care Hospitals from TPG Capital. PE firms have also been driving deal activity in IT services businesses such as Quest Global Solutions (where Carlyle acquired a 30% stake) and IBS Software Pvt.

Ltd (where Apax Global acquired a 30% stake from Blackstone Group). However, several transactions have seen domestic companies outbid large PE firms. In the case of Cipla, the Torrent-led consortium bid is said to be higher than that of the private equity firms in the fray.