Consolidation of businesses across sectors and domestic consumption will drive M&A activities: Satish Kishanchandani, Pioneer Legal

India’s growing importance in the global economy and optimism about a surge in domestic consumption along with a clear focus on infrastructure development will also drive Mergers & Acquisition (M&A) activities, where sectors such as automotive, infrastructure, clean energy and healthcare will drive the transaction activities, says Satish Kishanchandani, managing partner of law firm Pioneer Legal, in an interaction with ET.

Excerpts:

The Financial Year 2024-25 has just begun. How do you assess the landscape for M&A activities this year, and what sentiments are emanating from your clients regarding the prospects ahead?

India is well poised for growth this year and in the coming years. The M&A activity in 2023-2024 has been more than the PE activity. This is despite the prevalent global geo-political situation. Clients are expecting good growth, and are willing to invest in expansion and R&D. This year should see a continuation of the M&A activity of last year and should pick up pace once the general election process is over. Consolidation of businesses across sectors is expected to continue the M&A activity. Certain sectors such as automotive, infrastructure, clean energy, healthcare, etc. will see more activity.

In dissecting the anatomy of deal dynamics, what key factors are expected to exert the most significant influence on M&A transactions throughout the fiscal year?

The key factors namely the stabilisation of the rupee, interest rates and availability of significant dry powder with PE and sovereign funds will exert significant influence on M&A transactions. These factors along with India’s growing importance in the global economy and expected increase in domestic consumption combined with the need to build significant infrastructure for the expected growth, will fuel M&A activity.

Zooming in on sectoral nuances, which industries do you anticipate will serve as the primary engines propelling the pulse of deal-making activities in the foreseeable future?

Sectors propelling deal-making activity would be industrial including manufacturing, infrastructure, renewable energy, pharma and healthcare.

With an eye toward regulatory evolution, what policy reforms are on the horizon that could potentially fuel an uptick in M&A undertakings within the Indian market?

Reforms have been made over the last few years in the financial, insurance and renewable energy sectors together with ESG. Amendments to the competition law provide insight into the intent about combination and enforcement, which may bring out more clarity, though not yet enacted. All this could potentially fuel an uptick in the M&A activity within India. More than reforms, investor confidence in the Indian growth story and its sustainability would be important.