This year proved to be quite a robust one for mergers and acquisitions for Indian corporates.

Buoyed by the recently-implemented Insolvency and Bankruptcy Code (IBC) and an extremely competit ive atmosphere in the mobile and e-commerce space, dealmaking reached new highs in 2018.

As the government continued to push for resolutions, there was a wave of consolidation in sectors most affected by the build-up in non-performing loans such as financial services, energy and steel. There was also a feeding frenzy in the consumer goods and e-commerce space as foreign companies swooped in to take aim at India’s massive customer base.

The trend is expected to extend into 2019. In addition, as Internet penetration increases, especially in rural areas, consumer goods will experience an unprecedented level of deal activity as companies merge with each other to gain the upper hand.

While this could be tempered by an outflow of capital and election uncertainty, the relative weakness of the Indian currency could see a lot more acquisitions by foreign companies.

Here are some of the largest deals that grabbed headlines this year:-

A global retail giant buys India’s largest e-commerce firm

In a move with decidedly global implications given its war against Amazon, Walmart announced plans to acquire a 77% stake in Flipkart for around $16 billion in May 2018. At the time, the possibility of a future IPO of Flipkart was also mooted.

The deal, which was completed in August, also included $2 billion of fresh equity funding to support Flipkart’s expansion plans as it takes on Amazon’s Indian subsidiary for the top spot in India’s e-commerce market. Flipkart is said to be building its logistics and supply chain network by onboarding ‘kirana’ stores, making moves into the online grocery space and sustaining its discount-heavy model. Walmart, meanwhile, continues to expand its wholesale business in India.

The merger of India’s No.3 and No.4 telecom players finally gets approved

In August 2018, Vodafone’s Indian subsidiary and Idea Cellular received the final approval for their merger from the National Company Law Tribunal (NCLT). The deal, which has been in the works since last year, will create India’s largest telecom operator by subscribers (430 million) and revenue market share (37%) and help the two struggling companies fend off competition from market leaders Airtel and Reliance Jio.

Vodafone will own a 45% stake in the combined entity. Meanwhile Idea’s shareholders will take a 29% stake and Aditya Birla Group, Idea’s parent, will own 26%. The merged entity, which is highly leveraged, will try and capitalise on lower network costs, the promotion of value pricing packages and a joint push into data 5G services.

A state-run energy giant is created to help the government meet its disinvestment target

In January 2018, Oil and Natural Gas Corporation Ltd. (ONGC) announced the acquisition of a 51% stake in Hindustan Petroleum Corporation Limited (HPCL) in a deal aimed at helping the central government meet its disinvestment target for 2017-18. The move follows a well-established precedent of the government relying on transactions between firms its owns to help it out during periods of financial stress.

ONGC spent a total of nearly ?370 billion ($5.2 billion) on the purchase of a majority stake in the state-backed refiner, with most of this amount being funded through loans thereby exacerbating the former’s debt woes.

Tata Steel takes over another steel firm after submitting the highest bid for it in an insolvency auction

In May 2018, Tata Steel successfully submitted the winning bid for bankrupt rival Bhushan Steel in an auction. The ?352 billion ($4.9 billion) offer for a 73% stake in Bhushan Steel was approved by the NCLT. Bhushan Steel was one of the 12 major non-performing accounts submitted by the Reserve Bank of India to the NCLT for resolution proceedings under the IBC last year.

The merger will help Tata Steel improve its domestic capacity and make inroads into the automotive steel industry, which is dominated by Bhushan Steel. The steel industry is set to witness an even bigger deal soon, should Arcelormittal's ?420 billion bid for the bankrupt Essar Steel be approved.

Hindustan Unilever to buy GSK’s consumer nutrition brands in one of India’s largest consumer goods deals

Earlier this month, Hindustan Unilever Ltd (HUL), the Indian subsidiary of consumer good giant Unilever, said it would purchase GlaxoSmithKline’s (GSK) key consumer nutrition brands like Horlicks and Boost, thereby putting an end to months of speculation and discussions.

The all-stock deal, which also includes a majority stake in GSK’s Bangladesh unit and distribution rights to medical brands, is valued at ?317 billion ($4.5 billion) and will see HUL take over GSK’s consumer healthcare operations and merge them with itself. The deal is slated for completion at the end of 2019, by which time HUL is expected to become India’s largest publicly-listed food and refreshments company.

Merger of three public-sector banks

In September 2018, India’s Finance Minister, Arun Jaitley, announced the consolidation of Bank of Baroda (BoB) and Vijaya Bank, which had a bad loan ratio of 5.4% and 4.1%, respectively, with the struggling Dena Bank, which had a bad loan ratio of 11%. As a result of its poor financial health, Dena has been placed on the RBI’s Prompt Corrective Action (PCA) watchlist.

The merged entity will become the third-largest bank in India and have nearly 9,500 branches and a bad loan ratio of 5.7%. Bank of Baroda is the largest of the trio with ?10.3 trillion of total business and a pan-Indian presence, while the regional-focused Vijaya and Dena have ?2.8 trillion and ?1.8 trillion of business, respectively.

As India’s public-sector banks have borne the brunt of the country’s bad loan problem, the Modi administration’s approach has been to have smaller, weaker banks swallowed by larger ones, just as in the case of State Bank of India acquiring five associate banks last year.

And there was one large international deal in the agrochemicals space

In July 2018, India’s UPL Ltd, a maker of crop protection and agrochemical products, said that it was acquiring Arysta LifeScience Inc, the farm pesticides business of the US’s Platform Platform Specialty Products Corp, for $4.2 billion. The combined entity is expected to be the fifth-largest agrochemicals company in the world.

The all-cash deal will cement UPL’s strength in the global market for crop protection products by giving it greater access to markets like China, the US, Africa and Latin America. However, it represents a significant change of pace for a company with a track record of smaller deals in the hundreds of millions of dollars region and could push it into an unenviable debt position.