India’s buoyant mergers & acquisitions market fuels a $100 billion boom

Presently India’s economy is historically in the midst of its largest enterprise consolidation explosion which has investment bankers focused on the local mergers and acquisitions market setting themselves up for even greater activity in the near future.

Deal brokering throughout susceptible companies in India have reportedly reached transactional highs around the $104.5 billion mark in 2018, crushing its previously recorded annual transactional highs with nearly a quarter of the trading year remaining. This reported statistical analysis is based on trustworthy sources responsible for data compilations from Bloomberg. According to one market expert, the eventual annual traded figure won’t come as too great a surprise if it manages to once again surpass the $100 billion mark in 2019, this is as per a Gurgaon-based partner, Sanjeev Krishan, with PwC India tasked with focusing on deals in private equity.

The basis for this burgeoning market rests on the enactment of new bankruptcy laws, a supremacy contest in the current e-commerce industry and a vast war treasure in Asian markets that focus on private equity funds. This brought about to date unmatched prospect for mergers and acquisitions trading in what has become known as the fastest growing of the world’s major emerging economies.

This latest growth spurt not only brought new opportunities to the doorstep of the investment banking community, it delivered India more aid in ridding its economy and fiscal system of uncollectible debt, allowing business enterprise to modernise a retail sector responsible for delivering services and consumer products to its 1.3 billion citizens. According to JM Financial Ltd Mumbai’s Co-CEO of investment banking, this latest trading boom represents a once-in-a-lifetime opportunity.

India Introduced Revised Bankruptcy Code

The recent introduction of a newly revised bankruptcy code in India led to a general attitude leaning towards acceptance of consolidatory measures amongst delinquent borrowers who currently find themselves with their necks-in-a-noose, according to Utpal Oza, India Investment Banking Head at Nomura Holdings. These delinquent borrowers encompass major industrial sectors affecting infrastructure, power and steel, lending to trades that saw during May 2018 over $5 billion transferring hands during a deal for the purchase of bankrupt Bhushan Steel Limited by new owners Tata Steel Limited. The deal marked the second largest trade between two local companies in India.

An overly active consumer sector marks what is possibly the next area up for financial renewal through India’s explosive mergers-and-acquisitions market. Earlier this year Walmart’s acquisition of Flipkart Online Services was, at $16 billion, historically the largest buyout by a foreign investor in India, concurrently Alibaba Group Holdings, Inc, and Tencent Holdings Limited continues to look actively into acquiring a stake in India based business enterprises to expand their footprint into India. Berkshire Hathaway Inc. under Warren Buffet reached an August agreement for an investment into the backing company behind digital payment solutions market leaders, Paytm.

Morgan Stanley predicts India’s annual online consumer market spend is expected to take a sixfold leap, reaching $200 billion within the next decade amid a cheap data plan, smartphone proliferation, another sector set to become the next great battlefield for market dominance.