The Hindu Business Line : IIM-K finance meet discusses patterns in M&A deals

Kochi, Sept. 8 Mergers and acquisitions are a two-way process, with Indian giants like the Tatas acquiring global brands like Jaguar and Land Rover while global players like Daiichi acquires Ranbaxy, Mr Kamlesh Gandhi, Country Head, Investment Banking of Religare, said.

Delivering the inaugural address at Arthanomics, the annual Finance Seminar of the Indian Institute of Management-Kozhikode, he said that there was substantial potential in the industry and the numbers and size of mergers and acquisitions are poised to increase.

The theme of Arthanomics 08 was ‘Mergers and Acquisitions — India Inc on the Prowl’. Describing the entire investment process as “long, tiring, often frustrating, but ultimately a hugely rewarding process”, Mr Manoj Gupta, Vice-President, Nexus Capital Advisors, offered a list of practical tips that should be followed when presentations to venture capitalists were made.

Evaluating risk

Mr Ravi Mani, Associate Director, Equirius Capital, explained the nitty-gritty of investment banking as he elaborated on what takes place behind the scenes during the M&A process. Mr Sadashiv Rao, Senior Director at IDFC, talked about the essence of infrastructure financing while elaborating on market analysis and the different types of risk on which a project can be evaluated.

Mr Hemendra Aran, founder and CEO of Aranca, addressed the students on why developing economies like India are attracting an increasing number of mergers and acquisitions. He spoke about the patterns of cross border M&A activities that have emerged over the years.

He also stressed on the importance of focusing on cultural issues which have been a major reason behind the failure of acquisitions across the globe.

Mr Som Krishna from ICICI Investment Banking Group spoke about the contrast in the deals happening internationally and in India. He maintained that several positive aspects such as successful integration of earlier acquisitions, profits in line with expectations and liberalisation will drive M&As in India.

However, challenges such as tight liquidity conditions, economic slowdown and high cost of borrowing in the debt market might impede the rate of M&As.

Consolidation expected

A panel discussion on ‘Cross Border M&A’ was also held as part of the seminar with the panel consisting of eminent speakers. Major challenges and complexities faced by firms in first identifying the targets and then integrating them into the acquirer’s business were discussed in detail.

The discussions also focused on the current scenario and major trends in the financial services sector in India with the industry becoming more capital intensive.

As Indian corporates become increasingly a part of global mergers and acquisitions, more consolidation is expected in the future.

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