Indian companies go shopping

A surge in the number of foreign acquisitions by Indian companies is opening
up a new opportunity for UK advisers wanting to take advantage of the explosive
growth in India’s booming economy.

The main focus for UK dealmakers has been on advising companies wanting to
buy businesses in India. The growing appetite for overseas purchases from India,
however, has seen corporate financiers re-gear themselves to take advantage of
vendor-driven business.

So far this year, Indian corporates have spent over £1.1bn on 29
international acquisitions, according to research by Close Brothers. This
followed a buoyant 2005 when £2bn was paid for 42 foreign companies. Alka Bali,
a director at Close Brothers, said the trend was set to continue after the high
level of activity in the early months of 2006.

‘A key influence is not only the growing ability of Indian corporates to
finance these deals, but their increasing confidence,’ Bali said.

The UK is one of the main markets where Indian groups are doing their
shopping. Over the past four years, only the US has been a more popular hunting

Bali said that even if there was slowdown in the global merger and
acquisition market, the activity of Indian corporates was unlikely to ease, as
the companies were cash rich and enjoyed access to liquid debt and private
equity markets, both in India and internationally.

‘Even if there are global market corrections in the coming months, we do not
expect this level of Indian acquisitions to abate. The momentum in the growth of
the Indian economy is too advanced for this trend to reverse,’ Bali said.

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