Local firms ramp up their M&A activity

Indian companies are increasingly acquiring local assets, frequently outperforming private equity firms. This trend is likely to continue as Indian corporates seek to expand their portfolios, distribution capabilities, and technology platforms.

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While large conglomerates like Reliance, the Tatas, or the Adani Group previously dominated domestic consolidation, many mid-sized corporates have stepped up in recent years to expand their footprint and capabilities through acquisitions.

“Over the last year, we are seeing increasing participation in domestic consolidation from large- and mid-size Indian corporates across sectors and deal sizes. We expect this domestic consolidation trend to continue, as Indian corporates will continue to be acquirers of strategic assets to strengthen their product portfolios, distribution capabilities and technology platforms,” stated Amit Thawani, managing director and head of investment banking, India at Nomura,

According to Thawani cleaner balance sheets have helped Indian companies make these purchases. He further added, “With cleaner balance sheets, high liquidity, low leverage and access to capital, corporate India has turned into buyers of assets from being sellers of assets a few years back, a trend which will likely continue to remain relevant.”

Some recent M&A deals in which Indian companies have emerged as buyers include Torrent Pharmaceutical’s acquisition of Curatio Healthcare, Sheela Foam Ltd’s acquisition of Kurlon Enterprises Ltd, Godrej Consumer Products Ltd’s acquisition of Raymond Consumer Care Ltd, Dabur Ltd’s acquisition of Badshah Masala Pvt. Ltd, Nirma Ltd’s acquisition of Stericon Pharma Pvt. Ltd, and Hinduja’s proposed acquisition of Reliance Capital Ltd.

Torrent is also bidding on the Hamied family’s interest in Cipla, while Nirma is bidding on Glenmark Life Sciences Ltd.