 "India critical pillar in our global advisory biz, says Rothschild & Co")
Global financial powerhouse Rothschild & Co sees India as a critical pillar of its global advisory business, with the country surpassing Southeast Asia in deal volume and emerging as a key market for mergers and acquisitions (M&A), private equity, and private credit, said Aalok Shah, managing director and co-head of India, Rothschild & Co.
With private equity firms expanding their presence in India, the financial services company aims to strengthen its on-ground operations. “India has become a very integral part of our offerings to clients,” said Shah in an in-person interview. “Many of our clients want to understand the Indian market—whether to invest or expand their Indian businesses globally.”
Rothschild established its India presence in 1999 with a small team focused on privatisation and cross-border deals. Since then, it has expanded to a 30-member banking team covering all sectors. “We are a fully integrated team within a global network, covering multiple sectors,” said Shah, identifying technology, infrastructure, and clean energy as key focus areas.
“Both in terms of volume and value, India is now a much larger market than Southeast Asia. China used to be significant, but in recent years, it has become more inward-focused,” he said. “Cross-border activity in China has declined significantly.”
Tech, consumer, and clean energy to drive India’s next M&A wave
Technology, consumer tech, clean energy, infrastructure, and pharmaceuticals are expected to drive the next wave of M&A in India. “In technology, services like enterprise resource planning (ERP) and software will see M&A activity,” said Shah. In consumer tech, consolidation is likely as “market leaders are attracting more capital, while smaller players are struggling.”
Renewable energy is also expected to remain active, with recent listings of ACME and NTPC Green paving the way for more initial public offerings (IPOs). “We’ll see more such listings,” said Shah. “In infrastructure and roads, M&A activity is picking up.”
The pharmaceuticals and healthcare sectors are also witnessing increased M&A, largely driven by divestments. “Industrial deals will be more selective, focused on specific subsectors,” he added.
Private credit fills funding gaps amid equity challenges
The private credit market in India is “very active,” with both banks and global funds competing for deals, Shah said. Promoter financing, real estate, and acquisition financing remain key themes. “Some players are also involved in restructuring, acquiring assets through the National Company Law Tribunal (NCLT), turning them around, and then selling them,” he said.
Private credit is emerging as a viable alternative as equity financing becomes more challenging. “When equity capital is harder to raise, promoters and investors are increasingly turning to private credit,” he added.
Rothschild expands India team to strengthen presence.
Rothschild ranks among the top five or six banks in India by deal volume, though it lags in value as it is not a “balance sheet bank,” Shah noted.
To strengthen its position, the firm is expanding its India team. “We’ve added more senior professionals to cover each sector, along with sub-sectors,” he said. The firm has also brought on senior advisors, including Naina Lal Kidwai as non-executive chair of the board, and has hired a dedicated equity capital markets (ECM) advisory expert for IPO mandates.
According to Shah, limited partners (LPs) continue to back established Indian private equity firms but remain cautious about new entrants. “LPs are comfortable investing in India-focused general partners (GPs) who have delivered returns,” he said. “However, they are less inclined to back first-time fund managers.”
Venture capital (VC) fundraising remains selective. “VCs that have not returned capital are struggling to raise new funds. Meanwhile, successful VCs are attracting more capital—essentially, winners are securing a greater share of LP allocations, while new entrants face challenges.”
Continuation vehicles (CVs) remain limited. “Some funds have yet to reach the end of their lifecycle with problematic assets,” Shah said. “Even for those nearing the end, the Indian market is not experiencing significant distress. These assets are growing, so fund managers prefer extending their funds or rolling them into new funds rather than selling.”