“M&A activity in India continues to boom amid global recession.”

Contrary to global trends, India’s mergers and acquisitions (M&A) activity will continue to grow on a fast-paced trajectory this year, fueled by attractive asset availability and positive investor sentiment I guess. Consulting firm Bain & Company.

Vikram Chandreshekhar, partner at Bain & Company, said:

Meanwhile, India’s M&A deal value surged 139% last year, compared to a 36% decline globally and a 22% decline in the Asia-Pacific region.

The findings also highlight the availability of assets that are 53% more attractive in India to the global market.

“The willingness of sellers to exit at current valuation multiples is largely recognizing companies as quality assets,” said Chandreshekar.

In a correspondence with VCCircle, he also said the Indian seller is looking to exit the business entirely, allowing for a more seamless asset transfer.

As for multinationals, optimism for investing in India as a long-term investment market is improving. The opportunity is particularly attractive to global companies looking to diversify their supply chains, the report adds.

“India stands to benefit from recent supply chain disruptions. This shift is facilitating trade in areas such as active pharmaceutical ingredients, specialty chemicals and contract manufacturing,” it said.

Global trade has been hit by supply chain disruptions caused by Covid-19, with China one of the worst hit countries.

According to Reserve Bank of India data, total foreign direct investment (FDI) inflows have declined from an annual average of $60 billion over the past three financial years (fiscal years) 2020 to 2022 to increased to over $80 billion. Pre-pandemic (2017-2019).

Other factors contributing to the strong outlook include ample dry powder in private equity (PE) to deploy, a strong balance sheet and investors making bold bets on newer sources of growth, especially in a recession. Includes trust.

“We are seeing strong M&A activity across sectors such as financial services, utilities, manufacturing and healthcare. We are doing it,” said Karan Singh, Managing Partner of Bain & Company.

Among other key themes, startups operating in the consumer tech, fintech and edtech sectors have witnessed the biggest consolidation activity in India over the past few years, says the report.

“Fast-growing rebels are aggressively buying up startups. We’re buying companies that are running out.”

Indian start-up funding fell 35% year-on-year (to 5 December) to $24.7 billion due to a decline in late-stage funding, according to a report by market intelligence platform Traxcn. .

Some of the implications for this fast-paced M&A deal activity include talent retention. This is due to the fact that 38% of India-based executives say they experience such challenges, compared to the global average of 30%, and that in trading he combines both ESG and digital capabilities. to facilitate multiple M&A transactions. These will be important themes in the future.