Global M&A Trends Report |
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India |
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(Asia Pacific)
Firm
Shardul Amarchand Mangaldas & Co
Contributors
Iqbal Khan |
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| With respect to private M&A, what are three things on top of mind for M&A practitioners in your jurisdiction? | Three things top of mind for private M&A practitioners in India are:
The regulatory landscape is ever-evolving and maturing - therefore, structuring of transactions is most critical. In addition, legal and financial due diligence is extremely important to identify and take corrective measures to adjust the valuation upfront rather than bring an indemnity claim later. There is generally a massive disconnect between the valuations expected by the companies and the true worth of the company which has often resulted in down-rounds and subsequent downward valuation adjustments by the investors - therefore, to avoid these issues, diligence must be undertaken in a prudent manner so as to identify any gaps and blind spots, this would also help in identifying the right valuation to some extent. |
| With respect to private M&A, where does your jurisdiction see most deal activity? | Most private M&A deal activity is categorized as mid-market. |
| With respect to private M&A, what sector sees the most deal activity in your jurisdiction? | Most private M&A deal activity is seen in the Health Care and Life Sciences sector. |
| What are your predictions for private M&A deal volume in your jurisdiction during 2024? | Private M&A deal volume in 2024 is predicted to be the same as 2023 deal activity, a lot of companies are now looking at IPOs which may slow down M&A for a bit, however, funds have a lot of dry powder so we expect M&A activities to continue in some sectors. on the balance, we think that the deal activity will remain the same for 2024. |
| With respect to public M&A, what are three things on top of mind for M&A practitioners in your jurisdiction? | Valuation does not play as big a role in public M&A since the price of publicly listed shares is largely market-driven and the investors are required to undertake transactions at such market-determined prices on account of regulatory restrictions. As far as structuring is concerned, public M&A requires far more complex structuring at times since the laws and regulatory restrictions are more nuanced and restrictive. Even the diligence exercise in respect of a listed company is very different since there are restrictions involving unpublished price-sensitive data which is typically permitted to be shared only in control deals and diligence is largely conducted based on publicly available information. |
| With respect to public M&A, where does your jurisdiction see most deal activity? | Most public M&A deal activity is categorized as top-tier given the market cap of such companies. |
| With respect to public M&A, what sector sees the most deal activity in your jurisdiction? | Most public M&A deal activity is seen in the Financial Services and Manufacturing sectors as India has seen some significant movement in these sectors in the public M&A space. |
| What are your predictions for public M&A deal volume in your jurisdiction during 2024? | As explained above, markets are seeing a lot of synergies and companies are IPO-bound, so we expect the public M&A activities to ramp up a bit in 2024. |
| Please share any other insights with respect to M&A in your jurisdiction: | India is shining and the government policies and regulatory changes are all aimed at inducing greater deal-making in the country. We remain hopeful that 2024 will continue the streak that 2022 and 2023 saw and we see some massive M&A deals happening, especially in the Health Care, Financial and Technology sectors - the general election in the country will also have some bearing on it. |
Global M&A Trends Report
India
(Asia Pacific) Firm Shardul Amarchand Mangaldas & CoContributors Iqbal Khan
Updated 30 Jan 2024Three things top of mind for private M&A practitioners in India are:
- Commercial: valuation expectation gaps
- Legal/general: legal due diligence
- Legal/general: transaction structuring
The regulatory landscape is ever-evolving and maturing - therefore, structuring of transactions is most critical. In addition, legal and financial due diligence is extremely important to identify and take corrective measures to adjust the valuation upfront rather than bring an indemnity claim later. There is generally a massive disconnect between the valuations expected by the companies and the true worth of the company which has often resulted in down-rounds and subsequent downward valuation adjustments by the investors - therefore, to avoid these issues, diligence must be undertaken in a prudent manner so as to identify any gaps and blind spots, this would also help in identifying the right valuation to some extent.
Most private M&A deal activity is categorized as mid-market.
Most private M&A deal activity is seen in the Health Care and Life Sciences sector.
Private M&A deal volume in 2024 is predicted to be the same as 2023 deal activity, a lot of companies are now looking at IPOs which may slow down M&A for a bit, however, funds have a lot of dry powder so we expect M&A activities to continue in some sectors. on the balance, we think that the deal activity will remain the same for 2024.
Valuation does not play as big a role in public M&A since the price of publicly listed shares is largely market-driven and the investors are required to undertake transactions at such market-determined prices on account of regulatory restrictions. As far as structuring is concerned, public M&A requires far more complex structuring at times since the laws and regulatory restrictions are more nuanced and restrictive. Even the diligence exercise in respect of a listed company is very different since there are restrictions involving unpublished price-sensitive data which is typically permitted to be shared only in control deals and diligence is largely conducted based on publicly available information.
Most public M&A deal activity is categorized as top-tier given the market cap of such companies.
Most public M&A deal activity is seen in the Financial Services and Manufacturing sectors as India has seen some significant movement in these sectors in the public M&A space.
As explained above, markets are seeing a lot of synergies and companies are IPO-bound, so we expect the public M&A activities to ramp up a bit in 2024.
India is shining and the government policies and regulatory changes are all aimed at inducing greater deal-making in the country. We remain hopeful that 2024 will continue the streak that 2022 and 2023 saw and we see some massive M&A deals happening, especially in the Health Care, Financial and Technology sectors - the general election in the country will also have some bearing on it.