The Influential Law Firms in Maharashtra 2019

the value add brought in by consolidation, viz.
improvement in their size, operating model, scalability,
access to technology and newer markets and improved
operational efficiency, (ii) While global private equity
players have been active in the M&A space in India, the
recent years have shown rekindled interest from global
strategic buyers as well who have bought into the ‘India
growth story’, given the relative slow-down in the
Chinese economy, (iii) Though traditionally, private
equity funds have been keen to acquire significant
minority interests in companies, in recent times, a lot of
them have been engaged in buy-out deals. They have
come of age and are more than willing to deploy the
knowledge of Indian market and businesses acquired
over time to efficiently put together management teams
and get boots on the ground to realize the maximum
potential of the acquired companies, (iv) Owing to the
new angle brought in by the Insolvency and Bankruptcy
Code, 2016 (“IBC”) in the form of banks being forced to
initiate the IBC process within 180 days of default, it is
expected that several assets will be put on the block for
insolvency resolution/ turnaround, leading to more
M&As by strategic investors, as well as private equity
funds, especially via platform deals, which seem to be
the flavour of the month, given the focus by investors on
the delicate interplay between governance, performance
and the need to deleverage, (v) A fair number of large
corporations like United Spirits, Tata Power, PNB, etc.
have been hiving off their non-core businesses and assets
to address stretched balance sheets, pare debt and to fund
further growth, thus stimulating M&As, (vi) The US-
China trade war may be a boon for the India, especially
in light of the aggressive ‘Make in India’ campaign by
the Government of India wherein manufacturing sector is
being given a fillip through various ways and means. In
addition to the attractiveness of such companies to US
based strategic investors and PE-buyout funds, the fact
that the IP laws and regime in China are attuned to
favouring Chinese companies leading to numerous IP
infringements, blatant thefts of US companies’ IP, may
push more foreign investors and corporations to Indian
shores searching for growth, (vii) Inclusion of global
deal documentation standards, especially typical US deal
terms in India M&A documents (altered to suit the
distinctive Indian regulatory conditions) like earn-outs,
escrows, extensive use of representations and warranties,
indemnifications, etc. have given a high level of comfort
to foreign acquirers, who know what they are getting
into by signing the dotted lines, (viii) Renewed interest
of global pension funds and sovereign wealth funds
(especially from Singapore, Canada and Abu Dhabi)
owing to attractive prospective returns are also giving a
boost to M&As, and (ix) Last, but not the least, the
political scenario of the country should not be ignored
while crystal ball gazing, for the policies and regulations
(especially Securities, Foreign exchange related, Income
tax, Companies and Competition laws) that may make or
break a sector depend on which way the political winds
blow (case in point being the recent restrictions imposed
on FDI in the e-commerce industry). The results of the
general elections in 2019, and the regulations/policies
made post that by the new Government, may affect the
M&A space, though your guess would be as good as
mine on the extent of the same.
To sum up, in my opinion, though there may still be
issues impeding the growth of M&As in the Indian
market and regulations, the robust India growth story
based on solid economic indicators coupled with the fact
that companies usually take such decisions with an eye
on the long-term should act like winds filling the sails of
the M&A juggernaut, helping it slice effortlessly through
the seas of uncertainty.
32| June 2019|