Indian companies to actively pursue overseas M&A avenues: Survey

NEW DELHI: Looking to diversify business activities into newer markets, Indian companies are expected to actively pursue merger and acquisition opportunities overseas in the next three to four years, says a survey.

Consultancy firm Tecnova, in a recent survey of professionals in the country, said many corporates are bullish about the domestic economy as well as global opportunities.

"There has been an increased confidence in Indian companies to diversify/expand, clubbed with the need to reach new markets and acquire technology," Tecnova India Chairman and CEO Abhey Yograj said.

According to him, corporates are bullish on the Indian economy and expect M&A activities to be driven by stronger fundamentals, greater availability of finance options and improved stock markets.

According to Tecnova, M&A deals involving Indian companies stood at nearly $ 19 billion as of September 30 this year.

The consultancy firm noted that M&A transactions could significantly rise in the next three to four years.

Tecnova's conclusions are based on a survey of more than 100 people, that focused on deals announced, lapsed or completed in past five years.

As per the survey, around 70 per cent of the respondents were certain that their business would look at outward M&A activities over the next one year. About 26 per cent were more or less firm in going for deals over one year while 41 per cent considered M&A as a possibility.

Tecnova said 61 per cent respondents opined that they would undertake M&A with the objective to increase market share. Another 50 per cent said transactions would be mainly aimed at acquiring resources.

In terms of funding, majority said they would first look at cash reserves before deciding on debt to finance M&A transactions.

Further, the survey found that 93 per cent professionals felt that the most difficult phase of M&A was deal-structuring and negotiations.