India May See M&As Worth $50 Bn on Back of Stressed Assets in 2018

According to different data compilations, there were a total of 944 transactions of M&A in India.

A man watches Indian Indian stock market indices on a display screen on the facade of the Bombay Stock Exchange (BSE).

(Photo: AP)

India is likely to see mergers and acquisitions (M&A) worth USD 50 billion in 2018 on the back of plenty of stressed corporate assets on offer at tempting valuations, according to Assocham Year Ahead Outlook.

The report observed that India's M&A transactions witnessed a quantum jump of 170 percent in valuations and over 70 percent in the number of transactions in the year gone by on the basis of various estimates.

According to different data compilations, there were a total of 944 transactions (664 domestic and 280 cross-border) in 2017 worth USD 46.5 billion (USD 13.1 billion domestic and USD 33.4 billion cross-border), said the chamber.

This was against a total of 553 transactions (358 domestic and 195 cross-border) worth USD 17.5 billion (USD 7.2 billion domestic and USD 10.3 billion cross border) in 2016.

The chamber pointed out that there has been a quantum leap in M&A transactions in India with more focus on sectors such as healthcare, telecom, energy, real estate, media & entertainment, banking, insurance, oil, cement and consumer products.

The M&A opportunities in 2018 would remain robust given the fact that lot more assets continue to remain under stress. Several big ticket projects referred to the NCLT (National Company Law Tribunal) under the Insolvency and Bankruptcy Code would see change in promoters in areas like real estate, steel etc.

Assocham Secretary General D S Rawat

The chamber suggested easing of guidelines and legislative support in the Income Tax Act and the Competition Act to boost mergers and acquisitions (M&A) activity in India.

"Amendments in the Stamp Act, 1899 to bring uniformity of Stamp Duty in all Indian states particularly to M&A transactions can prove to be a catapult for the future M&A's in India," Assocham said.