India is going to be one of the global hotspots for M&As. Here are the numbers

As per global law firm Baker McKenzie, the domestic mergers and acquisitions (M&As) is likely to grow three-fold to more than USD 49 billion by 2019.

As per the report, in 2016, the domestic M&As was at USD 17.5 billion and the sum is expected to jump to USD 28.5 billion in 2017.

"India is predicted to be one of the global hotspots for M&As in coming years, with the total value of M&A transactions (domestic and in-bound) more than doubling to USD49.3 billion in 2019," the report said today.

The estimates are based on easing of threats to the global economy going forward which will help dealmakers regain confidence in the domestic market. In number of deals, the same is expected to nearly double from 553 in 2016 to 916 in 2019. This year 786 transactions are likely to take place.

While domestic deals in 2019 will be USD 22.6 billion of the total USD 49.3 billion, cross border and inbound deals will together account for USD 26.8 billion, it said.

Ashok Lalwani of Baker McKenzie India, told reporters that while there can be uncertainties related to the US policies under the new president Donald Trump, there are various opportunities for Indian firms to look at the US which is seeing recovery. He also noted that the US would want to expand its business globally.

Interestingly, he also said India as well as other Asia-Pacific countries will be increasingly looking at investment opportunities within Asean regions to insulate themselves from other global uncertainties.

"The Reserve Bank's more accommodative monetary policy along with solid domestic demand should support M&A and IPO activity in the next two-three years," Lalwani said.

"We do expect overseas corporate buyer activity to pick up as well, as India continues to be a focus for emerging market investors globally. Consolidation, restructuring and asset sales by highly-leveraged companies are expected to continue and drive M&A activity here," he added.

Sectors that are directly linked to the consumption story-financials, consumer, healthcare, Internet and real estate-will likely see good momentum on the M&A front. M&As will see some correction in 2020 where it is expected to fall to USD 38.8 billion from USD 49.3 billion in 2019.

Besides, a strong pipeline of IPOs is also in place with public issues worth USD 4.76 billion in 2019 up from USD 4.04 billion in 2016. This year is likely to see IPOs worth USD 5.80 billion.

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