Indian firms may outdo Western companies in acquisitions

Indian companies are poised to outdo Western firms in acquisitions and mergers, with outward deals from the country soon overtaking inward investments, claimed a new study.     

Deals like Tata's acquisition of Jaguar Land Rover are just the tip of the iceberg, leading accountancy firm KPMG, which has tracked ventures between emerging market businesses and developed economies since 2003, said.     

During the last five years, Indian firms have made 322 deals in countries such as the US and Europe, while 340 Indian firms have been swallowed by inward investors, it stated.      

According to a report in The Observer, Ian Gomes, chairman of KPMG's new and emerging markets practice in the UK, predicted that outward deals from India would soon overtake the number of inward investments.     

Back-Office IT expertise is India's best-known export but takeover targets have been in diverse sectors, from Whyte and Mackay whisky, bought by India's United Breweries headed by Vijay Mallya last year, to London's oldest stockbroker — Hitchens, Harrison and co -- bought earlier this year by Delhi firm Religare Enterprises.     

Barring the Tata, Mittal and Ranbaxy deals, most of the deals were relatively small. Gomes said the average value might be just $50 million.     

Vikas Pota, director of Saffron Chase, a communications firm aimed at British-Indian business, said "We're witnessing something that can only be described as an industrial revolution in India."     

He said despite the growing market at home, Indian businesses look overseas for expertise, as well as markets.

"They feel that to capitalise on the Indian opportunity, they need to be global players themselves," he said.