Upload
pankaj-sharma
View
219
Download
0
Embed Size (px)
Citation preview
8/3/2019 (Why overseas M&A options are off India Incs menu for now _ Firstpost)
1/11
Saturday, December 24th 09:35 AM IST
RSS
Sign in Register
WEB18
#Sachin Tendulkar#Dinesh Karthik#Vaclav Havel#Ricky Ponting
Firstpost
Tech
Delhi court summon FB, Google, 19 others for hosting obscene content
Economy | Investing
The games banks play: will high deposit rates lure the NRI?
Front page
India
Politics
World
Business
Economy
Investing
Life
Bollywood
Sports
Tech
Blogs
Mumbai
FP Exclusives
Photos
Cartoons
Video Room
eBooks
Why overseas M&A options are off India Incs menu for now
Sourav Majumdar Dec 21, 2011
Follow@firstpostin
#CorporateStrategy#Grant Thornton#India Inc#M&A#strategy
Share0
Tweet 4
Indian companies for whom inorganic growth was a key element of strategy are doing a rethink. New acquisitions have becomewell-nigh impossible owing to a series of problems.
There are worrying signals for mergers and acquisitions (M&As). While some brave mid-sized companies may still be scouting
around for buyouts overseas, the general consensus is that Indian companies will be cutting back on acquisitions in the coming year.
Like ShareShare 1More from this Author
Financials emerge largest wealth creating sector
More from Business
Despite poor demand in real estate, prices refuse to godown
y overseas M&A options are off India Incs menu for now | Firstpost http://www.firstpost.com/business/why-overseas-ma-options-are-off-in...
11 24-12-2011 09:42
8/3/2019 (Why overseas M&A options are off India Incs menu for now _ Firstpost)
2/11
ith interest rates being where they are in India, funding
an acquisition today is a very tough proposition. Reuters
Already, trends suggest that M&A figures in 2011 have been lower than that in the previous year. A report in The Economic Times
quoting Grant Thorntons estimates says that outbound deals this year have fallen rather dramatically to just over $10 billion from $22
billion-plus the previous year, as concerns over imminent economic slowdown hit India Inc.
While investment bankers are continuing to engage with the top brass
of those companies which had either announced acquisitions going
forward, or were planning strategic buyouts overseas, privately most
agree that the M&A option is now virtually out of India Incs growth
plans.
Says a top executive at a frontline global investment bank: With
interest rates being where they are in India, funding an acquisition
today is a very tough proposition. The market will not take kindly to
companies which do so.
Some companies among them Marico and Thermax have already
put their M&A plans on the backburner, according to The Economic
Times report. Some mid-sized companies, which had made public their
M&A plans, are also likely to join the ranks, senior investment
banking sources toldFirstpost.
Even if dollar funding was a less expensive option, given the
exchange rate, even that is also turning out to be a huge problem, saidanother investment bank head. Add to that the mark-to-market (MTM)
hit (where the market values of acquisitions are written down), and there is likely to be a major hit on the market valuations of such
companies as shareholders will likely vote with their feet if companies take such risks in these times, investment bankers explained.
Companies may cry themselves hoarse that these MTM hits will be reversed over time, but no one will listen in these times.
Companies will, therefore, have to wait and watch to avoid a further leveraging of their balance sheets as the cost of money still
remains at higher levels. Investment bankers reckon that only those companies, for whom some smaller acquisitions overseas make
strategic sense, will be brave and still go ahead with their plans.
If its a missing piece in an overall strategy for, say, an engineering or technology company, then it may still make sense. Otherwise,
clearly not, said one banker. Even in such cases, only smaller acquisitions will make sense. Companies which made $100 million
acquisitions will now be looking at buys of much smaller sizes and that too only for strategic reasons, if such buys are part of an
immediate strategy.
Further, investment bankers point out that companies will also be better off waiting rather than going for overseas buyouts since,
given the widely discussed policy paralysis, they wouldnt risk even smaller acquisitions when the policy-making environment is
fraught with confusion.
Share0
Tweet 4 0 Comments
Comments for this page are closed.
Real-time updating is enabled.
Like ShareShare 1
Firstpost
firstpostin
firstpostin The games banks play: will high depositrates lure the NRI? bit.ly/scUc3j12 minutes ago reply retweet favorite
firstpostin SC-led expert team to inspect Mullaperiyardam today bit.ly/u2HrnO12 minutes ago reply retweet favorite
firstpostin Duke of Edinburgh Prince Philip has heartsurgery bit.ly/tCZHOS12 minutes ago reply retweet favorite
firstpostin Team Anna gets a discount, will pay Rs 7lakh for fast at MMRDA ground bit.ly/vZ1uVT43 minutes ago reply retweet favorite
firstpostin EPL: Mancini wants away-day cheer for
More from this Author
Financials emerge largest wealth creating sector
More from Business
Despite poor demand in real estate, prices refuse to godown
y overseas M&A options are off India Incs menu for now | Firstpost http://www.firstpost.com/business/why-overseas-ma-options-are-off-in...
11 24-12-2011 09:42
8/3/2019 (Why overseas M&A options are off India Incs menu for now _ Firstpost)
3/11
#Newstracker
Despite poor demand in real estate,prices refuse to go down
Dec 23, 2011 0 Comments
The real estate market in India is an ideal
example of the subversion of demand-supply
economics.
#AXIS Bank Ltd#BSE Sensex
#Business/Finance#Jean Dreze
#NewsTracker#Pranab Mukherjee
#RealtyBites
Investors are realtys mafia; thats
why prices cant come down
Dec 23, 2011 31 Comments
Property prices are weak but given the
structure of the industry, there is no real hope
that prices will come down to affordable
levels
#FSI#Knight Frank#Liases Foras#property
prices#Realty Bites
#NewsTracker
Yes Bank joins the bandwagon, hikes
NRI deposit rates to 9.6 pct
Dec 23, 2011 0 Comments
Private lender Yes Bank said it will raise
interest rates on fixed deposits held by
non-resident Indians (NRIs) to 9.6 percent
Join the conversation
Like
66Like
Like
Man City bit.ly/ugwPmM43 minutes ago reply retweet favorite
firstpostin Australia name squad for first India test,
More from this Author
Financials emerge largest wealth creating sector
More from Business
Despite poor demand in real estate, prices refuse to godown
y overseas M&A options are off India Incs menu for now | Firstpost http://www.firstpost.com/business/why-overseas-ma-options-are-off-in...
11 24-12-2011 09:42
8/3/2019 (Why overseas M&A options are off India Incs menu for now _ Firstpost)
4/11
from 3.82 percent.
#Interest rate#NRI#Private banking#Yes
Bank Ltd
#List2011
Thought your car buy got expensive?
Auto cos had it worse in 2011
Dec 23, 2011 0 Comments
At a time when sales were hit badly by higher
interest rates on automobile loans and costlier
fuel, the auto industry made headlines for all
the wrong reasons.
#Automotive industry#CorpScoreCard
#List2011#Maruti Suzuki#Tata Motors#Tata
Nano
#WhoSaidWhat
Manmohan talks tough, chides India
Inc for spreading gloom
Dec 23, 2011 26 Comments
PM blamed corporate honchos for spreading
despondency with their consistent criticism of
govt but admitted evolving of consensus on
issues has taken longer due to coalition
politics.
#Ahluwalia#Chanda Kochhar#DeepakParekh#India Inc#Manmohan Singh#policy
paralysis#Ratan Tata#WhoSaidWhat
#NewsTracker
HDFC Bank raises the bar, offers 9%
interest on NRE deposits
Dec 23, 2011 0 Comments
The Reserve Bank of India deregulated
Like
9Like
LikeMore from this Author
Financials emerge largest wealth creating sector
More from Business
Despite poor demand in real estate, prices refuse to godown
y overseas M&A options are off India Incs menu for now | Firstpost http://www.firstpost.com/business/why-overseas-ma-options-are-off-in...
11 24-12-2011 09:42
8/3/2019 (Why overseas M&A options are off India Incs menu for now _ Firstpost)
5/11
interest rates on non-resident external rupee
deposits and ordinary non-resident accounts to
provide greater flexibility to banks to attract
dollars.
#HDFC Bank#NRE#Private banking
#private lender#RBI
Editor's picks
Fri 12.23
Thu 12.22
Wed 12.21
Tue 12.20
Mon 12.19
Sun 12.18
Food Bill will tie Manmohan's hands in raising prices
A minor change in clause will make it necessary for governments to seek parliamentary consent to change subsidised prices.
Firstpost Golden Chikoos of 2011: And the winner is...
Who cares about the Bharat Ratna. Firstpost announces the winners of the prestigious Golden Chikoo awards dedicated to
recognising the truly Indian achievements of 2011.
Man-to-man, India should thrash Australia
One of crickets clichs is that the captain is only as good as his team and thats probably where Dhoni will have a huge
advantage.
More from this Author
Financials emerge largest wealth creating sector
More from Business
Despite poor demand in real estate, prices refuse to godown
y overseas M&A options are off India Incs menu for now | Firstpost http://www.firstpost.com/business/why-overseas-ma-options-are-off-in...
11 24-12-2011 09:42
8/3/2019 (Why overseas M&A options are off India Incs menu for now _ Firstpost)
6/11
Movie Review: Don ka sequel hit hona thoda namumkin hai
Shah Rukh Khan as Don makes a king size impact, but the film clearly lacks a story.
Memo to Team Anna: Stay rigid, stay corrupt
Team Anna is close to victory even as politicians are looking for ways to scuttle the Lokpal Bill. This is the time for flexibility,
not rigidity in strategy.
US yields ground, says it shares blame for Pak airstrike
But the concession may not be enough to placate Pakistan, which demands a formal apology.
Australian research shows Tendulkar better than Bradman
The rankings have been created according to a players career aggregate runs, minus the total number of runs that an average
player of that era would accumulate over the same number of innings.
More from this Author
Financials emerge largest wealth creating sector
More from Business
Despite poor demand in real estate, prices refuse to godown
y overseas M&A options are off India Incs menu for now | Firstpost http://www.firstpost.com/business/why-overseas-ma-options-are-off-in...
11 24-12-2011 09:42
8/3/2019 (Why overseas M&A options are off India Incs menu for now _ Firstpost)
7/11
Can you defame an entire religion? Delhi Courts say 'yes'
Who determines whether a religion is hurt?
Anna, your timing's off: Why fast when Sachin's batting?
Annas fast is wrongly timed. With an India-Australia test, the wedding season and holidays in full swing, wholl join a fast for
a battle thats already half-won?
Enough is enough, says Sonia, puts govt, party in combat mode
Party chiefs combative position would be oxygen to the bumbling government.
Down Under: When Bedis India gave Australia an almighty fright
The 1977-78 series between India and Australia should go down as the finest series between the two nations.
Forget iPad 2, here are the top five gadgets for 2011
Weve taken a look back at 2011 to find the coolest gadgets. Some are ground breaking, either in design or technology, and
many of them will set the trends for 2012.
More from this Author
Financials emerge largest wealth creating sector
More from Business
Despite poor demand in real estate, prices refuse to godown
y overseas M&A options are off India Incs menu for now | Firstpost http://www.firstpost.com/business/why-overseas-ma-options-are-off-in...
11 24-12-2011 09:42
8/3/2019 (Why overseas M&A options are off India Incs menu for now _ Firstpost)
8/11
Needing a Lokpal is an indictment: Ex Solicitor General
Solicitor General Gopal Subramaniam created a stir when he resigned over the governments handling of a case involving Kapil
Sibal. Now he opens up about that controversy and more in an interview.
Govt working overtime on Lokpal? More power to Anna!
Cabinet meetings on a Sunday. Ministers and babus sitting up late at night to finalise the draft of the Lokpal Bill Why did it
need an Anna Hazare for the government to do its work?
Tears over Kim Jong-il's death are not fake
It is no surprise to find people shedding tears over the passing of a dictator, but what may surprise is that some of the tears shed
are spontaneous.
My child is shy and there's nothing wrong with that
Theres no trauma. She doesnt need honey and lemon or voice lessons. Shes just shy. In India today raising a shy child is a
tough job. Everyone thinks a shy kid can never realise her dreams.More from this Author
Financials emerge largest wealth creating sector
More from Business
Despite poor demand in real estate, prices refuse to godown
y overseas M&A options are off India Incs menu for now | Firstpost http://www.firstpost.com/business/why-overseas-ma-options-are-off-in...
11 24-12-2011 09:42
8/3/2019 (Why overseas M&A options are off India Incs menu for now _ Firstpost)
9/11
Ban the Gita? A look at Arjuna's doubts vs Krishna's wisdom
Despite repeated failure of public policy, why do we still privilege Arjunas doubts in Kurukshetra over Krishnas wisdom in the
Bhagawad Gita?
Here come the swingers: The ideological fallacy of "open" relationships
The latest conventional wisdom touts the virtues of infidelity as a healthy even desirable alternative to old-fashioned
monogamy. But whether you choose to swing, cheat or stay faithful, you still cant eat that cake and have it too.
Wrap up: Food is secured, who will feed Sensex? Rupee woes for MFs
The Food Security Bill promises to wipe out hunger but who will take care of the burgeoning fiscal deficit?
Mirror, mirror on the wall. Kim Jong-il the looniest tyrant of all?
Its hard to say with certainty, but Kim Jong-il ran a close race, with his numerous idiosyncracies.
More from this Author
Financials emerge largest wealth creating sector
More from Business
Despite poor demand in real estate, prices refuse to godown
y overseas M&A options are off India Incs menu for now | Firstpost http://www.firstpost.com/business/why-overseas-ma-options-are-off-in...
11 24-12-2011 09:42
8/3/2019 (Why overseas M&A options are off India Incs menu for now _ Firstpost)
10/11
About Firstpost Newsletter RSS Twitter Facebook Follow@firstpostin 15.2K followers
Verticals:
Front page India Politics World Business Economy Investing Life Bollywood Sports Tech Blogs
Plus:
Mumbai FP Exclusives Cartoons Video room eBooks
Ajit's flight to Union Cabinet is in-fact a journey to Lucknow
How epoch-making will be Ajit Singhs tenure as civil aviation head will be closely watched by the industry and markets alike.
Obama bans daughters from Facebook and he's right
The media, obsessed with social media, and politics, got the perfect winter silly season story with news that Obama has
banned his daughters from using Facebook.
When Didi picked up a brush: The portrait of a politician as an artist
While Mamata the politician is well-known to most of us, few outside Bengal have heard about Mamata the painter. In his book
Poriborton! An Election Diary, Ruchir Joshi encounters her creative side. An excerpt.
BJP wants a strong Lokpal made by Parliament: Advani
In a clear message to Team Anna, the BJP veteran said the supremacy of Parliament in Indian democracy cannot be challenged.
[+] Hot Topics:
Copyright 2011 Firstpost All rights reserved
Terms of use
Privacy
160kLike
More from this Author
Financials emerge largest wealth creating sector
More from Business
Despite poor demand in real estate, prices refuse to godown
y overseas M&A options are off India Incs menu for now | Firstpost http://www.firstpost.com/business/why-overseas-ma-options-are-off-in...
f 11 24-12-2011 09:42
8/3/2019 (Why overseas M&A options are off India Incs menu for now _ Firstpost)
11/11
Advertise
moneycontrol.com
ibnlive.com
in.com
tech2.com
cricketnext.com
More from this Author
Financials emerge largest wealth creating sector
More from Business
Despite poor demand in real estate, prices refuse to godown
y overseas M&A options are off India Incs menu for now | Firstpost http://www.firstpost.com/business/why-overseas-ma-options-are-off-in...