Nexdigm (SKP) is pleased to present the annual edition of Investment Chronicle – our periodical update on India's deal-making landscape that analyzes Mergers and Acquisitions (M&A), equity investments, and exits. In this edition, we cover India's transactions arena in 2019.
The phenomenal performance of 2018, with the total transactions value crossing the USD 100 billion mark, set a daunting benchmark for the years ahead. In line with anticipations around investor behavior, owing to global headwinds and political uncertainty in the country during the first half of the year, the total deal value declined to ~USD 80 billion in 2019.
While the aggregate value of M&A deals declined to half of 2018's record, Equity Investments, at USD 37 billion, salvaged the deal landscape this year with their highest performance to date. 30% of these equity investments are attributed to the Indian startup ecosystem, which is the third-largest in the world. Private equity exits, in contrast, plummeted to USD 5.6 billion due to volatile capital markets, which compelled investors to revisit their exit strategies.
Despite the deceleration in the transaction landscape this year, India's long-term market position remains optimistic. While there has been short-term turbulence, India continues to hold an edge over other developing nations in attracting FDI, encouraged by an immense captive consumption market and several measures taken by the government to maintain investor confidence in long term prospects.
The Union Budget 2019 further streamlined and relaxed FDI norms in aviation, media and insurance, information utilities, and contract manufacturing to attract investments and also promote the 'Make in India' initiative. Major foreign investors such as Softbank and Alibaba Group, as well as global business houses, plan to infuse further funds in India to tap opportunities in the domestic market, encouraged by the improvement in the ease of doing business.
The year saw the continued implementation of several reforms this year such as the Goods and Services Tax (GST), Insolvency and Bankruptcy Code (IBC), and the Real Estate Regulatory Authority (RERA). Fiscal measures initiated by the government, including the allocation of funds for infrastructure, bank restructuring, and drop in corporate tax rates, accentuate these to give a positive long-term outlook for the Indian Market. Such measures uphold investor confidence, encouraging them to bet on this market's upward potential.
Download >> Investment Chronicle - January - December 2019
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