Report: India Among Top M&A Markets in Emerging Asia

Kroll, an established global provider of risk solutions highlights in their report that India is among the top markets for M&A in emerging Asia due to the country’s potential for growth prospects. Most M&A deals were in Tech, media and telecom. This area also had the most value of M&A deals. Manufacturing also saw a promising increase in M&A deals. Overall FDI worth peaked in 2015 overtaking even China.

Here are some excerpts from Kroll’s release on the findings:

“India, 8th September 2016 – Favorable economic and demographic conditions, plus an encouraging regulatory regime, are transforming India into an ideal target market for inbound M&A in Asia-Pacific. Since 2011, inbound transactions have trended up, and overall foreign direct investment (FDI) in the country reached a peak in 2015 that placed India as one of the leading destinations for global FDI, ahead of regional economic rival China.

Illustrating this trend, India attracted 6% of all US outbound M&A transactions (deal volume) in 2015, surpassing the 2% of outbound M&A directed at China that year. So far in 2016, India has continued to attract US interest, with US$3.1bn through 27 deals compared to similar US investment in China at US$1.3bn and 13 deals.

General sentiment among foreign investors for Indian investment opportunities remains strong, creating a bright outlook for inbound M&A through the rest of this year and into 2017.”

Caution while investing

However, Kroll Managing Director and Head of South Asia Reshmi Khurana also stresses extra diligence and care should be taken when investing in such an active market especially in the light of still evolving financial regulations and auditing practices.

“Often the challenge for investors is to understand the potentially invisible aspects of the business, to gauge the true intentions of owners and to determine how such practices get recorded in the books,” says Reshmi. “For example, the owners of a company may be engaging in related-party transactions to generate cash. It is important for investors to understand whether the cash is being generated for legitimate business purposes or for paying kickbacks. This, combined with the fact that financial regulations, accounting practices and auditing standards are still evolving, means that investors cannot be sure that the financial statements necessarily represent the true health of the business.”


“Additional M&A trends and highlights:

- In 2015, inbound M&A totaled 227 deals worth US$19.6bn

- In the first half of 2016, 82 deals worth close to US$9bn were announced

- Technology, media and telecommunications companies accounted for 26% of deal value and 22% of deal volume since 2011 led by feverish interest in the country’s e-commerce market

- Inbound M&A in the consumer sector also saw substantial activity – 14% of deal value and 10% of deal volume – led by demographic factors such as the emergence of an increasingly young and working population and rapid urbanization

- The industrial and manufacturing space has also shown promise, courting 9% of deal value and 22% of deal volume since 2011, on the heels of Prime Minister Modi’s “Make in India” campaign to attract further overseas investment”

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For more than 40 years, Kroll has helped clients make risk management decisions about people, assets, operations, and security through a wide range of investigations, cyber security, due diligence and compliance, physical and operational security, and data and information management services. The company is headquartered in New York and present in nearly 30 countries, and serves a global clientele of law firms, financial institutions, corporations, non-profit institutions, government agencies, and individuals.