India Inc thrives in boom and doom: PwC
"Indian companies know how to do a deal in boom and also a deal in a doom scenario," Kapoor told PTI on the sidelines of the World Economic Forum`s Annual Meeting 2012 here.
Asked whether the prevailing global economic scenario would affect merger and acquisition deal volumes, Kapoor said the slowdown in Western economies should not be seen as a concern for India. "It is rather an opportunity. My sense is that India would become a larger player in the global M&A scene in the coming years. Indian entrepreneurs are very smart and they know how to take advantage of the prevailing economic conditions," Kapoor noted.
Going by estimates, M&A deals involving Indian companies were worth over USD 34 billion in 2011.
As per a survey of global CEOs released here by PwC, the confidence of business heads has declined sharply in the growth of the economy, but they are relatively more optimistic about the revenue growth of their own companies.
The survey, however, found that Indian companies are much more optimistic than their global peers and they are also less likely to indulge in any cost-cutting measures.
Speaking about the way Indian companies take advantage of the situation in their deal-making activities, Kapoor said: "Just before the global crisis of 2008-09, many Indian companies sold businesses to foreign players."
"On the other hand, many domestic companies are now looking to acquire assets abroad to take advantage of distressed valuations. The Indian entrepreneurs would certainly be benefited and India would be a net-gainer in the deal space," he noted.
Asked whether funding for these deals would be a matter of concern, Kapoor said that funds were not the main issue, but only the follow-own part. "If the deal is good and the acquirer is fundamentally strong, the funds would not be a problem. If a company maintains quality, the growth would follow," he said.
Starting off 2012 on a good note, Japanese entity Nippon Life Insurance inked a pact with India`s Reliance Capital Asset Management to acquire a 26 per cent stake in the latter for about Rs 1,450 crore this month. This is the largest foreign direct investment in the Indian mutual funds space.
Earlier this week, the Indian Cabinet approved mining major Vedanta Resources Plc`s acquisition of a majority stake in Cairn India for USD 8.48 billion.