President Barack Obama may believe the US is the most attractive investment destination in the world even as he and the American business community prevailed upon Prime Minister Narendra Modi to make India a more friendly place to do business, but Indian businessmen are now beginning to feel India is a better place for their money.
The most recent figures for mergers and acquisitions for the first nine months of 2014 show a robust rise in the value of domestic M&As at $11.1 billion, a rise of 207 per cent over the same period last year.
Even if one takes into account the fact that the Sun Pharma acquisition of Ranbaxy Laboratories was a massive $4.1 billion of the total $11.1 billion, the figure is still impressive compared to that achieved in the first nine months of 2013.
The M&A figures compiled by Thomson Reuters are significant as they mirror the business community’s confidence in the future of several sectors of the economy.
It will also lead to consolidation, and, perhaps, economies of scale. The highest acquisitions took place in the healthcare sector followed by energy and power, and then technology, media and telecommunication.
The appetite of Indian companies for acquiring companies abroad seems to have subsided and so have inbound M&As.
This should be good news for the government.
Currently GDP growth is not consistent or visible.
But this could change if Prime Minister Narendra Modi’s efforts on the ease-of-doing-business front and removing various irritants that hamper the growth of business succeeds. It could spur growth, particularly in manufacturing.
