India high on the agenda for dealmakers
Region

India high on the agenda for dealmakers

The pro-business policies of the current Indian administration has seen interest in the country increase, according to Herbert Smith Freehills’ new M&A survey

Notwithstanding volatility in the world economy, India is a clear target market for increasing numbers of global businesses. More than nine out of ten (95%) respondents to the survey expect South Asia – dominated by India – to see an increase in M&A activity over the coming years.

India appears to have become markedly more attractive to international investors under the leadership of Prime Minister Modi, who is widely perceived as pro-business.

Alan Montgomery, head of India M&A at Herbert Smith Freehills in London, says the Modi government has certainly prompted a boost in interest in Indian deals, even if the pace of reform has not been as quick as some had hoped – not least because the government does not control the upper house of the country’s parliament.

“The government has not yet been able to make the transformational changes that everyone expected,” Montgomery says. “However, they have done an exceptional job at communicating to the international investment community that India is ‘open for business’ and where they have been able to introduce policy changes to boost overseas investment they have done so. The aggregate of these smaller changes have really helped boost inbound interest. The relaxation of foreign direct investment policy has been a particular focus: we’ve seen a number of sectors opening or continuing to open up to overseas investors, including defence, insurance, rail, construction and broadcasting for example.”

The financial services sector has been particularly busy. According to Mergermarket data, financial services deals in India saw an increase of 52% to 41 from 2014. Of these, 66% of deals came from overseas, including, for example, the US$342 million acquisition of a further 23% stake in Reliance Life Insurance, which increased Japan-based Nippon Life Insurance’s stake to 49%.

Contact our experts

Stephen Wilkinson
Global Head of M&A
Tel: +44 20 7466 2038
Email: stephen.wilkinson@hsf.com

Roddy Martin
M&A Partner (UK/US)
Tel: +44 20 7466 2255
Email: roddy.martin@hsf.com

Nicola Yeomans
M&A Partner (Asia)
Tel: +65 68688007
Email: nicola.yeomans@hsf.com

Andrew Rich
M&A Partner (Australia)
Tel: +61 2 9225 5707
Email: andrew.rich@hsf.com

Frédéric Bouvet
M&A Partner (EMEA)
Tel: +33 1 53 57 70 76
Email: frederic.bouvet@hsf.com

Related content

BEYOND BORDERS: THE FUTURE OF DEALMAKING

After a record-breaking year for M&A last year, the start of 2016 has been more uncertain with the slowdown in the Chinese economy, depressed commodity prices and falling stock markets coupled with Eurozone instability all causing uncertainty in the global economy. However, despite these uncertainties, our two separate surveys, conducted in late 2015 and updated in 2016, demonstrate that the short to medium-term outlook for M&A as a priority focus for capital allocation by corporates remains extremely robust.

Download report
share