U.S. becomes favorite hunting ground for Indian companies
By siliconindia   |   Tuesday, 06 November 2007, 20:30 IST
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New Delhi: Indian companies, which has been on an acquisition spree, is estimated to have saved around $1.66 billion (Rs 6,500 Cr) in buying out overseas firms in the last six months as the rupee strengthened against the dollar, reveals Assocham in a study. Indian firms concluded about 70 merger and acquisition (M&A) deals between April and September, spending $14 billion and would have saved as much as $1.66 billion because of over 10 percent rupee appreciation against the dollar, an Assocham Eco Pulse (AEP) study said. "While homegrown IT companies are struggling to cope with the rupee pressure, the currency appreciation has given an advantage in terms of prospects for inorganic growth worldwide," says the study. The IT sector, which dominated the overseas M&A activity in the second quarter with deals worth $1.56 billion, would have saved $198.75 million in first half of this fiscal. Overall overseas buyouts of India Inc fell 64 percent in the second quarter, while valuation of deals with U.S. firms remained the at $2.9 billion for both quarters. While the absence of big acquisitions and global slowdown can be held responsible for the sharp decline in M&As by domestic firms in the international market, Rupee appreciation played an important role in keeping India Inc active in the U.S., said Assocham President Venugopal Dhoot. The chamber said it has been monitoring M&A deals since April this year. It tracked a total of 125 deals for the first half of this fiscal across various sectors like IT and IT enabled services, hospitality, steel, communications, infrastructure, textile, telecom and financial services. ($1= 40)

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