In this episode, Jyoti Banthia talks to Nandini Chopra, Managing Director at Alvarez & Marsal, and Bharat Anand, Partner at Khaitan & Co, to explore the changing landscape of mergers and acquisitions (M&A) in India and how it plays a pivotal role in driving economic growth and innovation.

Over the past few years, M&A activity in India has experienced a significant surge. In 2022 alone, nearly 20 deals were completed, accounting for approximately $112 billion.

Read: Indian mid-market companies set to lead M&A boom on strong growth and valuations

 Domestic M&A transactions dominated the scene with a total of 355 deals, while outbound transactions aggregated to about 61. Despite global headwinds like rising interest rates and elevated inflation, strategic M&A in India remains resilient, backed by robust domestic demand and healthy balance sheets.

 According to Nandini Chopra, the surge in M&A can be attributed to pent-up dry powder from private equity post-COVID recovery, which has fueled inbound transactions. While the IPO market has remained muted, private equity investments have played a significant role in capital requirements and valuations. The “China plus one” strategy has also attracted substantial foreign direct investments in India.

Read: M&A activity plummets to 3-year low at $65.9 billion in Jan-Sep

 Bharat Anand adds that investor confidence is driving M&A decisions, with many believing in India’s upward trajectory. Sectors such as healthcare, pharma, and auto have witnessed significant M&A activity. The advent of Indian strategies consolidating and foreign sellers exiting Indian counterparts has added an interesting dynamic to the landscape.

 Looking ahead, the M&A landscape in India is up for evolution. Regulatory changes, including government disinvestments, competition amendments, and foreign direct investment rules, are expected to influence deal structures and activity. Additionally, a shift towards ESG compliance and environmental concerns is likely to reshape industries such as green energy and the circular economy.

 Despite uncertainties surrounding the upcoming elections, the overall outlook for M&A in India remains optimistic. M&A is not only driving economic growth but also contributing to job creation and innovation. As India continues to position itself geopolitically and strengthen international relationships, investor confidence in the nation’s economic potential remains high.

 Listen in to learn more.

(Host: Jyoti Banthia, Producer: Siddharth MC & Nabodita Ganguly)

About the State of the Economy podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.

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