At first glance, one could be forgiven for asserting that things came together nicely for India in 2008. In the first half of the year there was the continuation of a four-year bull run that yielded stock market returns of more than 40%, a strong rupee, readily available and easily accessible credit, and a corporate sector seemingly awash with cash.
However, the second half of 2008 was tough going for all economies in the region and India was no exception. Its benchmark SENSEX fell 20%; the rupee lost a quarter of its value in a little less than three months and by the end of the year was down by almost 16% on the same period in 2007.
On top of this, the number of deals and their total value fell to levels not seen for quite some time. Grant Thornton statistics reveal India saw only 454 M&A deals yielding US$30.95bn in 2008, compared to 676 deals with a value of US$51.11bn just a year earlier.
“Things didn’t grind to a complete halt in 2008, but we came quite close,” said one of our judges. “You only need to look at the M&A statistics to see how much things dropped off – we didn’t have a Hutchison-Essar type deal this year.” But this isn’t to say to that India didn’t see any big ticket deals in 2008 – a look at the deals shortlisted in the inaugural ALB Indian Deals of the Year is proof enough that the country still saw its fair share of transactional activity.
But in many ways it wasn’t so much about the number of deals or their value. From GMR’s mega acquisition of Intergen to Dish TV’s innovative capital raising and HDIL’s unique structured slum rehabilitation project, all of the deals which claimed top spot this year did so because they provided a blueprint for how to close complex deals in the most inclement of economic conditions.
“If you look at the deals that were voted as the best this year it is clear that it’s not just the biggest deal that won by default. The most creative, the most innovative and the most unique deals won… deals in which lawyers and other advisors had to think outside the box,” said one in-house counsel. “The vanilla deals didn’t win, but the deals that lay out some sort of precedent were successful. I think we can expect to see some of the structures used here becoming standard in deals closed throughout both this year and the next.”
“If you look at the deals that were voted as the best this year it is clear that it’s not just the biggest deal that won by default. The most creative, the most innovative and the most unique deals won”