The industry chamber Associated Chambers of Commerce and Industry of India (ASSOCHAM) in its Year Ahead Outlook has stated that India is likely to witness mergers and acquisitions (M&A) activity worth $50 billion in the year 2018, on the back of plenty of stressed corporate assets on offer attempting valuations. Besides, it observed that the country’s M&A transactions saw a quantum jump of 170 percent in valuations and over 70 percent in the number of transactions in 2017.
As per the different data compilations, there were a total of 944 transactions (664 domestic and 280 cross-border) in 2017 worth $46.5 billion ($3.1 billion domestic and $33.4 billion cross-border). This was against a total of 553 transactions (358 domestic and 195 cross-border) worth $17.5 billion ($7.2 billion domestic and $10.3 billion cross-border) in 2016. The chamber pointed out that there has been a quantum leap in M&A transactions in India with more focus on sectors such as healthcare, telecom, energy, real estate, media & entertainment, banking, insurance, oil, cement and consumer products.
The report further highlighted that the M&A opportunities in 2018 would remain robust given the fact that lot more assets continue to remain under stress. It also noted that some big-ticket projects referred to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code would see change in promoters in areas like real estate, steel etc. It also suggested easing of guidelines and legislative support in the Income Tax Act and the Competition Act to boost M&A activity in India. It added that amendments in the Stamp Act, 1899 to bring uniformity of Stamp Duty in all Indian states particularly to M&A transactions can prove to be a catapult for the future M&A’s in India.