Incoming interest in Indian companies for mergers and acquisitions (M&S) will continue to be a challenge due to the high awards on the local market, said Peter Guenthardt, head of the Asian -Pacific global corporate and investment banking in Bank of America. He feels that with the dust that settles on new tariff modes, the activity of capital capital markets (ECM) in India is likely to reflect with mega initial public offers (IPO) that will soon hit the street.
“The incoming M&A and how it remains somewhat demanding due to valuation spaces. Paying more than three times earnings for Indian assets can be difficult to justify,” Guenthardt said. While India’s rapid growth attracts foreign strategies or global companies that want to buy assets in India, most of the growth is already price, he added.
“That’s why many private capital players would be willing to sell 100% of the company rather than persecute IPOs. However, due to the high public market award in India, many decide to mention and sell over time to maximize revenues,” he said.
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Guenthardt, who was in India last week at the annual Bofa Securities conference, remains a bull in the Indian activity. “I think we will see a wave of billions of dollars plus IPOs that hit the Indian market over the next 12 to 18 months. We expect ECM activity to stay high,” he said.
The depth of capital markets helps to go through agreements and IPO, which is the phenomenon that makes them stand out, Guenthardt said. “Last year, India led the world in the volume and yields of IPO and consolidated its position as the global capital market.
The Marquis transactions in which Bank of America participated is Bat’s Bat’s Block Trade in ITC LTD, Vodafone’s Block Block Trade in Indus Tower, Swiggy’s $ 1.3 billion IPO, Bajai Housing Finance $ 782 million and Ola Electric $ 734 million.
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For Guenthardt and his team, there are important advisory opportunities because of Indian companies with global ambitions. “Many Indian companies have global ambitions. The large corporations we are talking to are enthusiastic about Europe, America and have high affinity with the Middle East. I think they will continue to be very active in these markets,” he said.
GuendThardt expects a permanent flow of trade by sponsors (private capital). “India’s private capital allocation has risen. If you talk to most private own companies, they told you that Asia funds are now assigning 30-40% to India, 15-20% ago five years ago, emphasizing robust views,” he said.
Macroeconomic growth in India soothes global investors and bankers. “India is one of the biggest opportunities that is out there, not only in APAC, but globally. Looking at five to 10 years, stability in administration, return on the investment we have seen, massive infrastructure built by the government will eject India to the next level,” Guenthardt said.
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