A survey of Indian corporates by Baker McKenzie credits improvement in ease of doing business, Prime Minister Narendra Modi at the helm of affairs of the country and implementation of GST and Insolvency and Bankruptcy Code (IBC) for India Inc’s positive sentiment.
According to a survey by law firm Baker McKenzie, most mid-to-large sized Indian companies plan to increase their investment by 10 per cent in next two years regardless of political uncertainties, reports ET online.
"Despite some political uncertainty, a pulse survey of 100 C-suite executives in India found more than three quarters of mid-to-large sized Indian companies still plan to increase domestic investment by at least 10 per cent over the next two years," media reports quoted Baker McKenzie.
Further, it gives the credit for the positive sentiment to the improvement in ease of doing business, Prime Minister Narendra Modi at the helm of affairs of the country and implementation of GST and Insolvency and Bankruptcy Code (IBC).
"The outbound investment is very much measured. On the inbound side, we have seen quite a bullish interest from international multinationals willing to invest in India. Generally speaking, most of the investors mark India and China as the most important investment markets.
"Over the last four-five years, there has been increase in interest (for investment) for various reasons – Modi and ease of doing business. And also there is GST, there is IBC...and obviously India's growth rate compared to most markets is relatively high," the ET report quoted Ashok Lalwani, Global Head of Baker McKenzie's India Practice as saying.
Business leaders are almost as bullish about investing internationally, with almost two thirds looking to increase their offshore investments by 10 per cent or more, and another quarter planning to increase their international investment by up to 10 per cent, the survey shows.
This is very positive despite currency pressure and geopolitical tensions.
As regards merger and acquisition (M&A) involving Indian buyers, dealmaking will continue to rise, with 7 in 10 Indian business leaders expecting a significant increase in M&A in their industry, the survey reports.
Further, most Indian businesses are looking to acquire and invest in domestic market with South East Asia coming to a close second in the preference, the report says.
Lalwani said, ”The strong run of dealmaking and international expansion that has emerged in India in recent years is set to continue. We see some really interesting and ambitious business strategies developing among our Indian clients, as they look to grow, invest and raise capital in various markets around the world.”
With 44 per cent of respondents saying the US is a top target, it is the number one destination for Indian companies looking for M&A and other investment opportunities outside of Asia. Europe figures in the top four.
"Increasingly, Indian companies are finding South East Asia a new land of opportunity. We have seen transactions in sectors including healthcare, insurance, consumer and industrials between Indian companies and counter-parties in markets such as Malaysia, Indonesia and Thailand," he said. However, intra-Asian deal sizes are still usually smaller than those in Western markets, and the firm expects to see more mega deals involving Indian companies in the US and Europe making headlines, the report quoted the law firm.
However, sentiments of the business leaders were far less positive regarding the UK, which had until very recently been a key target country for Indian buyers, the survey shows.
Source: ET Online