**Surge in Mergers and Acquisitions in India Expected by 2025-26**
Mergers and acquisitions (M&A) in India are projected to experience a significant increase in volume by 2025-26, driven by a volatile equity market and robust corporate balance sheets, according to investment bankers and dealmakers at a recent summit. M&A activity in 2024 saw a decline, reaching a four-year low with a total deal value of $80.5 billion, an 11.4% decrease from the previous year, as reported by LSEG Deals Intelligence. However, 2023 marked India’s busiest year for dealmaking, with 2,756 deals announced.
### Factors Influencing M&A Activity
– **Market Volatility**: Arun Saigal, managing director and head of financing and M&A at Barclays India, noted that while M&A volumes decreased over the past two years, strong equity market performance offset this decline. He anticipates an uptick in M&A volumes in the next 12-18 months due to increased volatility in equity markets.
– **Strong Corporate Balance Sheets**: Chandresh Ruparel, MD and head of India at Rothschild & Co, emphasized that Indian companies currently possess their strongest balance sheets ever, with substantial cash reserves. He highlighted the significant opportunities available in the market, particularly as major corporations like Birlas, Adanis, and Tatas expand their operations and diversify.
– **Inbound M&A Activity**: Saigal also expects a rise in inbound M&A activity, which has decreased to approximately $50 billion annually from a peak of $70 billion. He noted a growing global interest in India, particularly outside the US.
### Key Sectors for Future Deals
Experts at the summit identified several sectors poised for increased M&A activity:
– **Infrastructure**
– **Energy**
– **Cement**
– **Healthcare and Pharmaceuticals**
– **Media and Telecom**
Amit Kothari, CEO of JK Cement, mentioned that his company has completed 3-4 acquisitions in the past two years, focusing not only on capacity expansion but also on acquiring know-how and innovation.
### Conclusion
With clean corporate balance sheets and a favorable market environment, the outlook for M&A in India appears promising. As companies continue to seek growth through acquisitions, what strategies will they employ to capitalize on these opportunities?
**FAQ: What sectors are expected to see the most M&A activity in India?**
The sectors anticipated to witness the highest M&A activity include infrastructure, energy, cement, healthcare and pharmaceuticals, and media and telecom.
