There are some things that get bigger and better with time. While the ‘better’ part may be debatable, bigger is certainly the case when it comes to mergers and acquisitions. As the new year rings in, experts are betting on another great year for India Inc in 2008. Investment banking circles predict that sectors like IT, telecom, financial services and infrastructure will be in the midst of M&A activity in the current year. Even as sectors like retail and insurance are coming into their own, bankers feel that one can wait for more clarity in guidelines before taking a call. Indeed, the ingredients are all there. India recently became the 11th trillion-dollar economy in the world. In terms of dollar millionaires, India ranks eighth. The year just gone by witnessed a stupendous rise in the quantum of M&A activity in the country with quite a few deals above the $1 billion-mark in size. In 2007, India attracted deals worth $68.32 billion, significantly higher than $28.16 billion in 2006 and $18.35 billion in 2005. Between 2003 and 2007, the value of outbound deals more than doubled each year, resulting in a compound annual growth rate of 108%. Of the total deals, M&A accounted for $51.17 billion while the remaining $17.14 billion was in the form of PE investment. […]

The year 2007 is clearly the year that saw the rise of private equity funds. According to those tracking the industry, $13 billion (which is approximately Rs 55,000 crore) was invested in Indian markets in 2007. Simply put, a relatively new segment of investors have entered the scene and have pumped in Rs 55,000 crore into Indian companies. Ask any investment banker, and he will call the year 2007 a watershed year as all mandates for fund raising were completed and he is on track to receive a hefty bonus. […]

A clutch of venture capital funds (VCFs), which have invested nearly $419 million in Indian information technology (IT) and business process outsourcing (BPO) firms till date, are now looking to diversify their investments into IT and IT-enabled services (ITeS) firms that generate revenues from the local markets. The move follows a sharp decline in revenues of the Indian IT sector as a result of the rising rupee, sub-prime turmoil and a slowdown in the US economy. The country�s leading IT companies, which have seen a drop in earnings due to the near 12 per cent appreciation of the rupee, have also to counter a possible drop in contracts from their US clients due to a slowdown in the world�s largest economy. As a change in strategy, VCFs are now looking to diversify into sectors such as consumer-based internet and mobile-technology companies, where revenues come from the local market. Venture capitalists are also looking for companies that are expanding geographically � those that are targeting non-US markets. Venture capitalists have pumped in more than $777million into India up to September 2007, according to the India Venture Capital report. About 54 per cent of all venture deals in India were for IT companies, the report said. […]