Telecom, pharma, IT to scorch deal street: CII

NEW DELHI: With the continued strength of the Indian economy and stock markets, corporate India is expected to participate fully in the global mergers & acquisitions (M&A) market in 2007, with significant deal activity expected in IT/ITeS, telecom, pharmaceuticals, energy, banking and financial services sector, according to a CII whitepaper on M&As.

The year 2007 could be the landmark year in Indian M&A market with many billion-dollar deals in the pipeline in sectors like energy & pharmaceuticals, the whitepaper said.

One of key enablers for future M&A would be availability of structured financing options. While high economic growth has left Indian companies flush with surplus funds, India Inc is already exploring exchanges like the Alternative Investment Market (AIM) of LSE, Kosdaq of South Korea, TSX of Toronto, Sesdaq of Singapore and the Euronext to take advantage of liberal listing norms, a quicker listing process and better valuations from wider range of international investors. Indian companies are expected to raise at least $2-3 billion from AIM alone.

With almost 60% of the investors in the market being long-term investors willing to invest in long gestation projects, AIM is likely to emerge as the preferred market for Indian companies to raise capital.

India Inc’s M&A spree saw it strike 480 deals in 2006, against 343 in 2005.