'M&A revolution has come of age'

All the three categories of mergers and acquisitions (M&A) -- domestic, cross-border inbound and cross-border outbound "� continue to go strong in India with plenty of creative financing happening, said industry experts at an IIT Madras seminar recently.

Speakers at a panel discussion titled 'The Great Indian Takeover Jamboree' held as part of Samanvay '08, the annual business festival of the Department of Management Studies DoMS, IIT Madras, noted that innovative M&A deals had grabbed the attention of the market.

Emphasising that M&As had taken off, R Ramaraj, ex-CEO of Sify and partner with Sequoia Capital, said companies were adopting new ways of scouting for and approaching merger opportunities.

As dollar depreciation continues, India and China have been powering the M&A juggernaut by virtue of their involvement in 50 per cent of the deals concluded.

Ramaraj, noted that in 1999 at the height of the dotcom boom, Sify had acquired a company valued at Rs 1 crore for Rs 500 crore. This decision resulted in its market capitalisation rising by a billion dollars on the Nasdaq, which went up to $11.5 billion.

"This was when such deals caught the imagination of the market. Today, such a decision wouldn't be a sound financial move. However, companies many times small are gobbling up bigger ones. Such steps need creative finance," Ramaraj said.

Manish Jain, vice-president "� Investment Banking, Atherstone Capital Asia, added that M&As were also being driven by loads of cash and strong balance sheets that companies possess today.