56% Indian company leaders curious in overseas deals: Survey

New Delhi: Despite the 2019 general elections, almost 56 per cent of Indian company leaders are more curious in overseas dealmaking in the coming 12 months than they were in the past year, a survey stated in this place on Friday.

According to Baker McKenzie’s Doing Business Globally survey, although only 11 per cent are less interested, almost 33 per cent of company leaders have the same level of interest.

The survey stated although Indian businesses are primarily looking for mergers and acquisitions (M&A) opportunities domestically (42 per cent), a quarter of respondents stated the wider Asia Pacific region is their leading target, with 16 per cent looking to North America.

“This is something of a shift, as North America has until recently been a firm favourite for Indian companies looking to buy abroad, less so Asia Pacific,” it noted.

The views were gathered as part of the survey of Indian company leaders at events in Bengaluru and Mumbai where more than 200 of India’s leading company people were surveyed on their dealmaking sentiments as well as the impact technology was having on their judgment making.

“In fact, technology was clearly a key motorist of India M&A deals abroad, with 38 per cent of Indian companies now saying that acquiring new tech and expertise was their number one reason for engaging in cross-border M&A,” stated the survey.

Gary Seib, Baker McKenzie Asia Pacific Chair, said: “While this positivity around global dealmaking is fantastic to see, it is specifically encouraging that India’s ambitions are further shifting a little closer to home.”

“While Indian corporates have traditionally looked to the US and Europe for M&A opportunities, including buying up high position brands and industrial and financial companies, multiple now further see the financial worth on offer in Asia Pacific, specifically as dissimilar markets incubate their own technologies, and supply chains over the region can be readily built,” he added.

Baker McKenzie further assessed recent initial public offering (IPO) trends amongst Indian companies and declared transactions likely to close in 2018, to bring a detailed picture of India’s IPO market.

“In fact, capital raised YTD (year-to-date) in 2018 is almost 400 per cent the amount raised in the same stretch in 2017. By mid-April last year, there were only 40 IPOs that raised $619 million, compared with more than $3 billion raised over 71 listings in 2018 so far,” it said.

The survey pointed out that if pipeline deals move forward for the rest of 2018, the complete financial worth of IPOs will be 34 per cent higher than the capital raised in 2017, although there is likely to be a slight drop in the number of deals completed.

“There is a strong sentiment amongst the Indian clients we speak to that although reforms have taken time and there have been a few other hiccups, the company community is quite bullish on the control of India,” stated Ashok Lalwani, Global Head of Baker McKenzie’s India Practice.

“While the voting will throw up a few uncertainty, this newfound assurance means Indian businesses will continue to seek out opportunities to grow, specifically over investments in new and complementary technologies,” he said.

The survey highlighted that all Indian exchanges are set to have their best performing year for seven years with $12.4 billion set to be raised in 68 IPOs over dual listings on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

“…while listing solely on the BSE are set to raise almost $2.8 billion and those listing solely on the NSE are set to raise $487 million,” it added.

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