Overseas acquisitions by FMCG cos make sense: aurang Shah, Geojit BNP Paribas Financial Services

Gaurang Shah, Asst. VP, Geojit BNP Paribas Financial Services, in a chat with ET Now talks about the acquisitions by FMCG companies.

What is happening to these FMCG companies everybody who is anybody - large and small - is going out and acquiring companies?

Quite true and it actually surprises the kind of funds that most of these companies are able to garner and of course pay for the acquisitions but the story lies in what kind of acquisition.

We heard recently that Godrej is also going ahead and doing a couple of acquisitions in the overseas market. Overall, I guess it make sense because if you had good geographical presence in the domestic market and if you have the capacity to spread your wings in the overseas market, you might as well get a part of those countries contributing to your bottom line and of course the top line numbers.

But all these stories of acquisitions will play over a period of time. I think knee jerk reactions will definitely be there from a short to medium term point of view one needs to be little bit careful and cautious as far as the price tag for such kind of acquisition is considered.