Top Citibank India officials predict that robust balance sheets and capital availability among Indian companies will promote an increase in outbound mergers and acquisitions (M&A) in the country's investment banking sector.
This wave of international expansion is anticipated to be driven by industries including technology, chemicals, and pharmaceuticals as local businesses seek to use their financial might to make acquisitions overseas.
"We anticipate that this trend would pick up steam starting next year as Indian businesses seek to expand internationally and buy assets. Rahul Saraf, head of investment banking at Citi India, stated in an online media exchange that "balance sheets have been de-levered, valuations are strong, and there is ample capital available for them, both publicly and privately. At the same time, there are fantastic opportunities around the world, and these factors combined will probably lead to a lot more activity from India than in the past."
According to Saraf, the past two years have revolutionized investment banking in India, not only in terms of activity volume but also in terms of deal quality and the effects they have on businesses and the economy. According to him, the growing participation of private equity, international corporations, and small and large businesses in India's capital markets portends well for the years ahead.
With a spike in activity across capital markets, M&A, and structured debt, Saraf observed a diversification in transaction types. "We are really pleased with the current state of affairs and the anticipated state of affairs in the upcoming decades," he stated.
The confidence was mirrored by Arvind Vashistha, India head of equity capital markets (ECM) at Citi, who stated that this year has proven to be the "biggest year for the Indian capital market" and that the capital markets pipeline is strong. He cited the increasing size of transactions and the variety of issuers, from financial sponsors to Indian businesses, as important themes.
Vashistha emphasized the robust involvement of both domestic and international institutional investors in the equities capital market.
With steady growth, we are currently the fourth-largest capital market. Earnings rise from quarter to quarter has boosted investor and market confidence, Vashistha said. Investors' desire for more paper is fueled by this fundamental factor, particularly given the stability of the secondary market.
Regarding the surge in initial public offerings (IPOs) in India, Vashistha credited investor confidence, controlled inflation, and economic progress. He pointed out that although domestic investors have taken the lead, international institutional investors have been active participants.
