Around 875 cross-border deals mostly done by those in the telecom, automotive and industrial sectors, involving Indian and Europe companies touched worth 90 billion euros were struck during 2006-12 and deal flow is likely to see a significant growth in coming days as well, a PwC report says.
According to the report 'India deals: taking stock of the tiger', India remains at the top of investors' lists of target markets, and Indian investors are leaders among emerging market buyers for western companies."Indian companies do not shy away from mega deals. Their agility combined with experience in operating both in emergingand developed markets, make them robust competitors in the global deal arena," PwC India leader for deals NV Sivakumar said.
After a drop in 2009, M&A volume from Europe to India remained at about 65 deals a year from 2009-11. The figure fell to 51 in 2012, as the Eurozone problems dented investor confidence however going forward the outlook looks bright.According to the report, nearly all European countries have seen an increase in Indian investment, and increased their investment into India over the past years and Britain leads its fellow European states for M&A to and from India.
A sector-wise analysis shows that majority of the very high value transactions have been in the telecom, automotive and industrial products sectors. A large proportion of all deals fall under the 100 million euro mark, PwC said.
Sivakumar further added that "deal demand by private sector should increase as the need to secure technology, brand and resources to move to the high end of product chain becomes critical."According to the report, the valuation multiples paid for Indian business are significantly higher than those for comparable mature market operations and, indeed, higher than those in other BRIC countries.
"The valuation premium attached to growth in India is undeniable — it highlights the quest for investors in sluggish developed markets to seek out growth where they can find it,"PwC India leader – private equity Sanjeev Krishan said.
Krishan further said "whilst India has not evaded the drag on growth exerted by the global economic slowdown, potentially exacerbated by local issues, the fundamental drivers of growth still remain."
