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Indian cos' M&A deals may touch $17B
By agencies
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Tuesday, 15 November 2005, 20:30 IST
NEW DELHI: The M&A activity in India will cross the $17 billion mark during this fiscal year, largely fuelled by banking, pharmaceutical, IT, media and telecom sectors, according to Assocham.
M&A deals worth $7 billion have already been concluded in the first half of the year, an Assocham study titled Eco Pulse said.
The study said boom in the financial markets, rising stock prices, lower interest rates and the overall economic condition are providing impetus to the M&A activity in these sectors. As a result, M&A deals, which were largely restricted to a few sectors such as IT earlier, have now spread across a multitude of sectors.
The study said the value of deals in the first six months of this year stood at $6.9 billion against $2.9 billion clocked in the first half of 2004. In fact, the whole of 2004 witnessed M&A deals of about $5.2 billion.
"Though the year 2005 did not start well for the pharma sector, which posted disappointing results mainly due to uncertainties with respect to VAT, the sector has of late realized the principle of `Survival of the Fittest'. Indian companies are now all set to take over companies in the global space," the study said citing the instance of Mumbai-based Nicholas Piramal India Ltd (NPIL) acquiring the UK's Avecia Pharmaceuticals.
Quoting the example of Helios and Matheson Information Technology, which acquired Vmoksha, it said consolidation has begun in the industry. While Helios and Matheson had expertise in networking and software, vMoksha had gained proficiency in the healthcare, banking and financial services segment. "The acquisition helped H&M expand its product portfolio in financial services and healthcare," it added.