Money & Banking

Cross-border acquisitions by companies on the rise: SBI Caps

Our Bureau Mumbai | Updated on November 17, 2011 Published on November 17, 2011

Indian companies appear to be making the most of the global downturn to acquire small to mid-sized companies overseas.

At least, the experience of investment bank SBI Capital Markets (SBI Caps) seems to suggest so.

In the January-October 2011 period, the investment bank piloted 120 outbound deals (Indian companies acquiring assets abroad) aggregating $10 billion.

SBI Caps also catalysed 105 inbound deals (overseas companies investing in/acquiring Indian companies) aggregating $19 billion, according to a company presentation.

“Most of the acquisitions by Indian companies have been in the information technology, auto and pharmaceuticals segments.

“The size of investment ranges from $10 million to over $130 million,” Mr Sameer Karulkar, Vice-President, said on the sidelines of a press meet called to announce that SBI Caps will be hosting a cross-border merger and acquisition forum on November 18.

New markets

Indian companies are making acquisitions abroad — Eastern Europe, Africa, Indonesia, and Australia — to get a foothold in new markets, tap raw materials and technology.

Earlier this year, SBI Caps, which is a wholly-owned subsidiary of State Bank of India, had helped Adani Group owned Mundra Port and Special Economic Zone to acquire Abbot Point Port in Australia in a $1.96-billion deal, said Mr Karulkar.

The investment bank is also helping the promoter of an Indian power company to disinvest stake to the Blackstone group for $300 million.

According to Mr S. Vishvanathan, MD and CEO, SBI Caps, the investment bank is geared to steer big ticket merger and acquisitions for India Inc.

In this regard, he mentioned that SBICAPS was the merchant bank for Bharti Airtel's $11 billion acquisition of Kuwait's telecom company Zain and Adani Group's nearly $2 billion acquisition of Australia-based Abbot Point Port.

Published on November 17, 2011
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