The Surge of Mergers and IPOs: A New Era for Indian Corporates
January 12, 2025, 4:59 am
The Indian corporate landscape is buzzing. Mergers and acquisitions (M&As) and initial public offerings (IPOs) are driving a new wave of economic momentum. In 2024, M&A activity soared by 38%, reaching a staggering $109 billion. This surge is not just a blip; it’s a sign of a robust market ready to embrace change.
The driving force behind this growth? Large conglomerates. They are the heavyweights in this arena, accounting for a significant portion of the transactions. Domestic corporates doubled their deal-making efforts, hitting $48 billion. The sectors leading this charge are technology, media, and telecommunications (TMT), consumer goods, and healthcare. Together, they contributed $55 billion in deals, a leap from $28 billion the previous year.
The momentum is expected to carry into 2025. Analysts predict a broader base of deals, fueled by the ambitions of Indian conglomerates. Companies like the Adani Group, Reliance, and Tata are not just players; they are game-changers. They are reshaping industries, from infrastructure to consumer goods.
International players are also reshaping the landscape. Many are divesting stakes in their Indian operations. This reassessment of global priorities is opening doors for Indian firms to acquire valuable assets. For instance, Brookfield’s acquisition of American Tower’s India assets and Coca-Cola’s sale of its bottling unit to Jubilant Bhartia are prime examples of this trend.
Valuations are rising, and share swap deals are becoming more common. Global private equity firms are ramping up buyout transactions. A new trend is emerging: continuation funds. These funds provide an exit route for limited partners while allowing general partners to remain involved. It’s a win-win situation.
On the IPO front, 2024 was a banner year. Companies raised a record $74 billion, a mix of IPOs, follow-ons, and sell-downs. This figure represents about 14% of the global equity capital markets. The IPO market is expected to remain vibrant, with around 50 new offerings anticipated in 2025. Companies like Tata Capital, Zepto, and Pepperfry are poised to make their mark.
Foreign investors are still keen on the primary market, despite selling in the secondary market. They accounted for 46.4% of IPOs and 45% of qualified institutional placements (QIPs). Investors are reaping rewards, with 71 out of 90 IPOs listing at a premium. The average IPO size has doubled to $212 million, showcasing the growing confidence in the market.
Sell-downs have also become a dominant theme. Multinational corporations like BAT Plc, Vodafone, and Whirlpool are monetizing their holdings in Indian subsidiaries. This trend is reshaping the investment landscape, providing liquidity and opportunities for local players.
The healthcare sector is not left behind. Tata Capital Healthcare Fund recently invested $20 million in Harsoria Healthcare, a manufacturer of medical devices. This investment is part of a broader strategy to tap into the growing healthcare market. Harsoria, which exports 90% of its products to over 60 countries, plans to use the funds to expand manufacturing and enhance research and development.
Founded in 2002, Harsoria is a fully integrated manufacturer of single-use medical devices. The company produces around 1 million devices daily, employing nearly 2,000 people across its facilities. Despite a slight dip in profits, the company’s net sales grew from Rs 153 crore to Rs 184 crore in the fiscal year 2022-23. This growth trajectory is a testament to the rising demand for medical devices.
Tata Capital Healthcare Fund has been active in the market, investing in 19 companies and achieving seven exits. With over $200 million raised across its two funds, it is positioning itself as a key player in the healthcare investment space. Recent investments include Mumbai Oncocare Centre and other healthcare ventures, showcasing a commitment to improving healthcare access and innovation.
The Indian corporate sector is at a crossroads. M&As and IPOs are not just financial transactions; they are the lifeblood of a dynamic economy. As conglomerates and private equity firms navigate this landscape, they are not just reshaping their own futures but also the future of the Indian economy.
In conclusion, the momentum in M&As and IPOs is a clear signal of a thriving market. With a mix of domestic ambition and international interest, the Indian corporate landscape is set for a transformative journey. The coming years will be crucial as companies adapt, innovate, and grow. The stage is set for a new era of corporate India, and the world is watching.
The driving force behind this growth? Large conglomerates. They are the heavyweights in this arena, accounting for a significant portion of the transactions. Domestic corporates doubled their deal-making efforts, hitting $48 billion. The sectors leading this charge are technology, media, and telecommunications (TMT), consumer goods, and healthcare. Together, they contributed $55 billion in deals, a leap from $28 billion the previous year.
The momentum is expected to carry into 2025. Analysts predict a broader base of deals, fueled by the ambitions of Indian conglomerates. Companies like the Adani Group, Reliance, and Tata are not just players; they are game-changers. They are reshaping industries, from infrastructure to consumer goods.
International players are also reshaping the landscape. Many are divesting stakes in their Indian operations. This reassessment of global priorities is opening doors for Indian firms to acquire valuable assets. For instance, Brookfield’s acquisition of American Tower’s India assets and Coca-Cola’s sale of its bottling unit to Jubilant Bhartia are prime examples of this trend.
Valuations are rising, and share swap deals are becoming more common. Global private equity firms are ramping up buyout transactions. A new trend is emerging: continuation funds. These funds provide an exit route for limited partners while allowing general partners to remain involved. It’s a win-win situation.
On the IPO front, 2024 was a banner year. Companies raised a record $74 billion, a mix of IPOs, follow-ons, and sell-downs. This figure represents about 14% of the global equity capital markets. The IPO market is expected to remain vibrant, with around 50 new offerings anticipated in 2025. Companies like Tata Capital, Zepto, and Pepperfry are poised to make their mark.
Foreign investors are still keen on the primary market, despite selling in the secondary market. They accounted for 46.4% of IPOs and 45% of qualified institutional placements (QIPs). Investors are reaping rewards, with 71 out of 90 IPOs listing at a premium. The average IPO size has doubled to $212 million, showcasing the growing confidence in the market.
Sell-downs have also become a dominant theme. Multinational corporations like BAT Plc, Vodafone, and Whirlpool are monetizing their holdings in Indian subsidiaries. This trend is reshaping the investment landscape, providing liquidity and opportunities for local players.
The healthcare sector is not left behind. Tata Capital Healthcare Fund recently invested $20 million in Harsoria Healthcare, a manufacturer of medical devices. This investment is part of a broader strategy to tap into the growing healthcare market. Harsoria, which exports 90% of its products to over 60 countries, plans to use the funds to expand manufacturing and enhance research and development.
Founded in 2002, Harsoria is a fully integrated manufacturer of single-use medical devices. The company produces around 1 million devices daily, employing nearly 2,000 people across its facilities. Despite a slight dip in profits, the company’s net sales grew from Rs 153 crore to Rs 184 crore in the fiscal year 2022-23. This growth trajectory is a testament to the rising demand for medical devices.
Tata Capital Healthcare Fund has been active in the market, investing in 19 companies and achieving seven exits. With over $200 million raised across its two funds, it is positioning itself as a key player in the healthcare investment space. Recent investments include Mumbai Oncocare Centre and other healthcare ventures, showcasing a commitment to improving healthcare access and innovation.
The Indian corporate sector is at a crossroads. M&As and IPOs are not just financial transactions; they are the lifeblood of a dynamic economy. As conglomerates and private equity firms navigate this landscape, they are not just reshaping their own futures but also the future of the Indian economy.
In conclusion, the momentum in M&As and IPOs is a clear signal of a thriving market. With a mix of domestic ambition and international interest, the Indian corporate landscape is set for a transformative journey. The coming years will be crucial as companies adapt, innovate, and grow. The stage is set for a new era of corporate India, and the world is watching.