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Boosted by Rosneft's $13 billion takeover of Essar Oil, India M&A is expected to touch $46.5 billon across 944 deals in 2017. This is a 165 per cent rise in value and a 70 per cent jump in volume from 2016, according to a forecast by Baker McKenzie.
India recorded 553 deals worth $17.5 billion last year. M&A activity is expected to continue to gather pace on the back of Modi government’s continued efforts in removing regulatory hurdles and simplifying laws to further attract foreign investment, until it reaches its cyclical peak of $52.8 billion in 2019.
Pending the results of the 2019 national elections, there is potential for more ambitious economic reforms. The forecast for 2020 is therefore not set in stone and deal trends could move in either direction, it added.
Indian Initial Public Offering (IPO) is set to reach the record-breaking value of $6.8 billion this year. Finance Minister Arun Jaitley's plans to raise ₹72,500 crore from disinvestment in 2017 and 2018, including ₹15,000 crore from strategic asset sales to help sustain this IPO momentum. The Indian IPO market continues to flourish as institutional and retail investors look for productive avenues to invest in, in a market with a shrinking interest rate, low bond yields, capped gold investments and real estate investments under scrutiny.
"I think the flurry of IPO activities is likely to continue for the rest of this year and well into the early part of 2018, as Corporate India seeks to take advantage of a surging Indian equity market. As the country prepares for the General Elections in 2019, I will not be at all surprised to see a surge of IPOs by private companies in the next few months before the deal window closes," Ashok Lalwani, head of Baker McKenzie’s Global India Practice, said.
"From a sector perspective, financials, industrials and healthcare have been some of the busiest sectors in terms of domestic listing. I think we can expect to see strong deal activity in these sectors and in real estate in the next 18 months," he added.
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