M&A deals could get clearer next year: Investec official

“2024 is clearly a year of significant uncertainty. The uncertainty has led to a slowdown in M&A activity,” said Charles Barlow, head of strategic execution at Investec. Investec Bank is dual-listed on the London Stock Exchange and the Johannesburg Stock Exchange and provides investment banking, private credit financing and brokerage services in India and globally.

“What we hope to happen is that this year we have all these elections in the United States, the United Kingdom, Germany, France, South Africa and India, starting in 2024 and going into 2025, whatever the outcome is in all these elections, at least globally Within, we will be able to better understand where we stand and M&A will start flowing,” Barlow said.

Specifically in India, a pick-up in primary capital markets could have a positive impact on M&A, said Vikram Surana, head of corporate finance and equity capital markets at Investec Capital Services (India).

“I think we’re seeing some signs of a slowdown in the IPO market. As the public markets cool down a little bit, the momentum will shift toward M&A and private sponsorship activity,” Surana said.

In India, Investec also provides equity capital markets services through a joint venture with SBI Capital Markets, a subsidiary of State Bank of India.

Over the past few years, M&A and private equity activity in the Indian market has fluctuated in a range of around US$60-100 billion annually. Surana added that this is likely to continue and private equity investments in manufacturing, capital goods, defence, packaging, chemicals, pharmaceuticals and IT (information technology) services will play a role.

Surana said that in the past few years, most private investors have achieved the highest IRR of 30-40% in India, which has prompted them to invest more in India through large platforms.

Indian companies are also showing greater interest in foreign deals through acquisitions of $100 million to $300 million, executives said. Barlow said if companies outside India buy products or companies internationally, they want to know how to connect those products or companies to India. In an acquisition, a company combines a smaller acquired company into one of its divisions.

On the other hand, for global investors, investing in India is the only way to enter the big market.

Barlow added: “If you invest in India, you can reach 150 million people instead of investing in 20 countries.”

Investec has executed 40-45 transactions in India over the past five years, averaging 8-9 transactions per year in the private markets. Surana said Investec, along with SBI Caps, has completed transactions worth $6 billion in the IPO market and its private credit team has completed 65 transactions in the past five years and invested $6 billion in India through credit.