India Inc India Inc: Tuesday, 05 January 2016 12:49

Indian companies display global M&A appetite boost

Indian companies displayed a robust appetite for global mergers and acquisitions (M&As) if the latest figures for 2015 are anything go by.

According to News Corp’s financial research platform VCCEdge, inbound and outbound deal values grew 70 per cent to $7.8 billion and 95 per cent to $5.1 billion respectively in the course of the last year. 

Healthcare, finance, telecommunications, information technology and materials were among the top five sectors for M&A activity in terms of value during 2015 and Mumbai toppled Bengaluru and Delhi, drawing 180 deals worth $4.6 billion, compared to 112 for New Delhi and 104 for Bengaluru.

These figures will come as a welcome sign for the government’s Make in India programme.

“Foreign Direct Investment (FDI) in India has grown by 35 per cent at a point of time when FDI across the world has fallen by 16 per cent," Amitabh Kant, who was recently promoted as Niti Ayog CEO, pointed out recently.

According to the VCCEdge report, M&A deal value declined 31.5 per cent to $22.9 billion in 2015, compared to $33.5 billion in 2014. The decline was a result largely due to domestic M&A deals falling 58.5 per cent to $8 billion during the year. This could be indicative of Indian corporates playing it safe and waiting for the right time to use their cash reserves to strike new deals.

Meanwhile, big-ticket deals ($100 million and above) constituted about 63 per cent of the total private equity capital invested into India 2015. There were 53 big-ticket deals with a total value of $13.2 billion, compared to 24 deals worth $5.8 billion in 2014. Angel and seed investments grew 64 per cent, increasing to $327 million from $200 million in 2014.

With private equity investments hitting an all-time high of $21 billion in 2015, the stage is set for an even more active 2016 in the M&A space.

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