Recent Emerging Trends In M&A Shaping The Market

In the post-pandemic period, the merger & acquisitions witnessing the upward trend in the market. As an after-effect of lockdown and economic degradation during the two years of covid 19, there were either big companies that remained sustained throughout the period of two years or small companies which were left with nothing and merger was the only way to stay in the ecosystem. 

Talking about the latest trend in the field of M&A, Abhishek Sanyal, Partner, Economic Laws Practice said that India has collected direct taxes more than indirect taxes in FY2022 which is a healthy sign for the Indian economy while he also mentioned that India contains demographic dividend and because consumption story can play out very crucial role. 

Sanyal also appreciated the infrastructural push government is leading and is also planning to do that will benefit the sectors like real estate, logistics and hospitality. 

Describing the role of private equity in India’s development, Varun Bajaj, Founding Managing Partner, RSD Bajaj Global Session Chair, said that India is the bright spot when USD 3.2 trillion of global VC funds are looking up to our market which is one of the fastest five growing economies in the world. 

Contrary to the other two views, Vaibhav Kakkar, Senior Partner, Saraf and Partners pointed out that when economies grow at a moderate pace, companies do flourish but when the economic activities are very rapid that is the time when many businesses fell rapidly. 

As covid gave birth to technology-based businesses, Kakkar agrees that because of being technology-based companies they have experienced massive hits but also these business entities are under massive issues of corporate governance. 

Kakkar further added that crumbling down the businesses is not a problem rather governance of the businesses is an emerging issue that needs attention.  Dushyant Bagga – Partner, TT&A touched upon the same issue and talked about the short-sightedness of the investors who invested in the companies that emerged during the pandemic and lost their relevance in the post-pandemic period. 

Navin Kumar, Partner, Cyril Amarchand Mangaldas mentioned the current winter experience by the PE and VC investment is short term. He pointed out the Russia-Ukraine war as the key reason behind the increment in the cost of capital and the stretch in interest rates.  Kumar also agrees with his co-panellist who highlighted the importance of long-term vision while investing. 

Kumar also raised the pointer of current awareness among the investor community regarding the verification of claimed assets by a company. 

The pandemic, Russia-Ukraine War has left major repercussions on the psyche of investors that is shaping the market and will have a long-term impact.