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India is one of the strongest markets for M&A deals globally

Source: PTI
August 11, 2014 16:04 IST
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India has emerged as one of the strongest performers in the deal-street across the world as M&As of Indian corporates increased by 10 per cent in the first half of 2014, whereas the number decreased by 1 per cent globally, says a KPMG report.

The Indian M&A figure is even more impressive over a 12 month period, wherein India Inc announced 21 per cent rise in M&A deals, as against 16 per cent rise globally.

"Market sentiment has improved significantly post the decisive outcome in the general elections earlier this year," Vikram Hosangady, Head-Transactions & Restructuring, National Leader-Private Equity, KPMG India said.

So far there has been a strong appetite for M&A deals in India and going forward it is expected to see significant momentum as corporates are optimistic about a revival in the investment cycle.

"Confidence that the new government will strive to revive the investment cycle and focus on policy and fiscal reforms is expected to keep India very active on the global radar," Hosangady said. Notwithstanding the rising profits and sustained confidence, the volume of worldwide deal completions remains static, and the value of these deals continues to fall.

According to KPMG's latest Global M&A Predictor, an improving global economy and large corporate cash reserves contributed to a 26 per cent increase in the value of announced M&A deals between January and June of 2014. Despite this dramatic increase, however, the number of completed deals fell by 2 per cent over the same period,

The fact that deal announcements have risen so dramatically during the first half of 2014 is an indication of the positive sentiment that is returning to global M&A markets.

The dramatic difference between announced deals and completed deals, however, possibly reflects the increased level of political interference in some key markets, the report said.

"Overall, the picture is a positive one. Appetite for M&A deals remains strong, capacity is going up and we are are starting to see an increasing number of deals being announced," Tom Franks, Global Head of Corporate Finance at KPMG said.

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