Election of Stable Government Could Push USD 30 billion M&A Deals in India

Published Date : Apr 15, 2014

Market watchers opine that the Indian market for mergers and acquisitions is poised to witness increase momentum following the general elections that are currently underway in the world’s largest democracy.

Analysts believe that post the general elections, the total value of M&A deals could well be over USD 30 billion, if a stable government is elected at the center in the current Lok Sabha polls.

Experts predict the pace of inbound deals to be much higher following the elections. Many of these deals had taken a backseat during the flurry of activity that preceded the general election as business entities weren’t sure of the new government’s stance. 

According to news reports and market research data from Grant Thornton, international deals were somewhat tepid during the first two months of 2014, with the markets only registered 170 deals valued at USD 4.2 billion. 

There are positive undercurrents in the market currently that the M&A situation would be much improved once the results of the general elections are out, given that the economic policies of the new government are conducive to FDI. 

According to a senior official from PwC India’s PE and Transaction Services, a stable government in India would mean putting economic reforms back on track—irrespective of whether it is the BJP or any other party. This would create a more favorable outlook for India by both private equity and strategic investors’ standpoint.

Overall, it is a stable government that’s being perceived as a solution to improve investor confidence in the Indian market. 

Some major deals that have been in the pipeline for want of clarity on the new government’s stance are in sectors such as telecom, metals, healthcare, real estate, and consumer products/services.