3 weeks ago
M&A Activity Builds as Acquisition Funding and IPOs Strengthen
Companies in India are expected to buy and combine with other companies more often.
This is called mergers and acquisitions, or M&A.
Investment funds are becoming more comfortable with deals where they take control of a company.
Banks are also considering loans to help pay for acquisitions.
This means deals may use both borrowed money and investor money.
Financial services are especially interesting to investors.
Manufacturing, industrials, defence and power-related businesses are also attracting attention.
The IPO market, where companies sell shares to the public for the first time, is expected to remain strong.
However, financial-services companies may wait until their public-market values improve before launching IPOs.
M&A activity is expanding as global buyout funds and domestic private equity firms pursue more control transactions.
Financial services remain the leading area of interest, while manufacturing and industrials are gaining momentum.
Banks are evaluating acquisition financing, combining Indian debt with equity funding.
Investors from the United States, Japan and South Korea are showing strong interest in Indian financial services, while Europe remains limited.
The IPO market is expected to exceed last year in volume and value, with manufacturing, industrials and power-related issuances attracting interest.
- Who
- Kamraj Singh Negi, managing director and CEO of investment banking at Pantomath Capital, discusses Indian M&A and capital markets.
- What
- The domestic M&A market is expected to strengthen, while IPO activity is forecast to remain strong.
- Where
- India and the Indian capital market.
- When
- The interview does not specify a publication or interview date; the outlook refers to the coming period.
- Why
- Banks are beginning to fund acquisitions, private equity firms are pursuing more control transactions, and investors see opportunities in sectors including financial services, manufacturing and industrials.
Expansion and growth outlook
Valuation and market constraints
Acquisition financing
Expansion and growth outlook
Allowing banks to fund acquisitions should make capital easier to access and support deals using both debt and equity.
Valuation and market constraints
The interview does not identify a specific opposing policy view, but notes that banks are still evaluating transactions rather than confirming completed deals.
Financial-services listings
Expansion and growth outlook
Financial-services companies are expected to return to the capital markets, initially through QIPs and later through primary issuances.
Valuation and market constraints
Current public valuations are depressed, and private transactions are occurring at higher valuations, which may limit value discovery through a public issue until markets stabilise.
Foreign investor interest
Expansion and growth outlook
Investors from the United States, Japan and South Korea see opportunities in Indian financial services because the sector is better understood and has clearer regulation.
Valuation and market constraints
European interest has remained limited compared with interest from those countries.
Key facts
- M&A outlook
- Activity is building, with global buyout funds and domestic private equity players pursuing more control transactions.
- Leading sector
- Financial services continue to attract strong interest.
- Emerging sectors
- Manufacturing and industrials are picking up; defence and power-related businesses are also being considered.
- Acquisition financing
- Banks are actively evaluating transactions that may combine Indian debt with equity.
- Foreign interest
- Investors from the United States and Japan are showing strong interest, with South Korea also highlighted.
- IPO forecast
- IPO volume and value are expected to be higher than last year.
- Financial-services IPOs
- Financial issuances may return first through QIPs, followed by primary offerings, as valuations stabilise.
Sources
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