India Inc's outbound M&As on the rise

By siliconindia   |   Tuesday, 11 December 2007, 02:08 IST
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Hyderabad: During the first half of current fiscal year the volume of overseas mergers and acquisitions (M&As) by Indian companies has grown phenomenally and is likely to reach further heights over the next one year. In the fiscal year 2006, the outbound M&As from India had a total value of $13.97 billion spread over 480 deals. According to the data from KPMG, a global network of professional firms providing audit, tax, and advisory services, the M&As in the first half of the current fiscal stood at $25.58 billion. "The average ticket size of these outbound M&A deals from India had also been growing from $25 million in 2005 to $39 million in 2006," Preet Mohan Singh, Director-Corporate Finance, KPMG India, told the delegates at a panel discussion on 'Indian M&A activity: Innovations and challenges' at Indian School of Business (ISB). The key drivers for this growth are increasing global consolidation, cost of production and valuation arbitrage, customs/skill set acquisition. "Above all capital markets in India now tend to view cross-border acquisition behaviour positively. This is fuelling outbound M&As from India," Singh explained. According to Raj Chatterjee, Director, M&A Motilal Oswal Investment Banking, a noteworthy trend in M&As was the wide gulf between the large companies and the mid-size firms. "An average Indian corporate CEO is not trained to implement a merger or take over," he observed.

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