Indian Mergers and Acquisitions Market: Far from Mature

The Indian M & A market is far from mature ; IPOs are a better bet for most industries ‘The only constant is change.’ This adage holds very well in the corporate sector. Yes, it is true that Indian market is in nascent stage and from decades, the rule followed in the business is to grow or die. Companies that do not grow tend to stagnate and destroy the shareholders fund. The need of the hour is either going for public or opt for some strategic M&A. Going public for a company is changing from private ownership to public ownership through initial public offering. M&A and IPO are considered as a vital part of a healthy economy and are the preferred ways of obtaining growth. The fund raising strategies are governed by market conditions. Generally, it is seen that in a bull market the number of IPOs increases while in a bear market, the number falls due to poor response of the investors using IPO. But M&A activities are governed by competition with the strategies of own-them-if-can’t-beat-them or dual-benefit. The terms merger and acquisition are completely different although they have common motive of “creating value for stakeholders”.
In 2009, public issues remained stagnant for most part of the year sowing the decline of 55% (in numbers) over 2008. Total proceed in the IPOs were of INR 15675M, with the major contribution of Real Estates (30%), Industries and Telecom (19%) and Media and technology (17%). The IPO market got active in 3rd and 4th quarter, while almost all the IPO are subscribed at higher band. In the first half of 2010, India accounted for 2% of the global IPO funds raised. With the total of $2.1billion 27 deals have been made. Coal India is set to begin a road show to promote what is expected to be India’s biggest stock listing worth $2.1 billion, which is likely to be released by October.
The flood of emerging markets IPOs was also largely fuelled by excess liquidity in the global markets. There has been a dramatic increase in the money