In the corporate world, they always tell the success story of India’s sixth richest businessman – Laxmi Mittal – the chairman of the world’s largest steelmaking and mining company, ArcelorMittal. They say that one of the major reasons behind his success is the speed at which he acquired companies and then fueled them with his unusual strategy.
‘Cold Steel’ , the book written by Mittal, reveals his strategies about acquisitions, including Arcelor. The story of acquisition is always inspiring for every business and the industry.
Infact, Mergers and Acquisitions, M&As are an integral part of every business and if they are happening in large numbers, it means the industry is achieving new growth. Since the last few weeks, India Inc has been heading in the same direction.
This week, on one hand, Reliance’s possible buy of European medicine chain Walgreens Boots reports made headlines, while on the other, there is a strong buzz about Adani group bidding for ACC and Ambuja cements. Also, in this month itself, the HDFC twins and Inox – PVR mergers were announced.
After a blockbuster year in 2021, India Inc is set for an encore this year.
A slew of big-ticket deals is likely to make 2022 the best year for M&As.
In the first four months of 2022 (till April 28), M&A deals, and deals in the making, have already crossed $105 billion, compared to $44.2 billion in the first four months of 2021, according to reports.
In 2021, the M&A deals of Indian firms stood at $149 billion, which is the highest ever annually, up 31 per cent over 2020.
The deals that are set to shoot up the tally this year include Reliance Industries’ likely $10-billion acquisition of European medicine chain Walgreens Boots; Adani and JSW groups bids for Ambuja Cements and the merger of the HDFC twins and between multiplex chains Inox and PVR.
Several deals are in the making in non-banking finance companies (NBFCs) as firms are trying to sell part of their businesses to reduce debt.
Mergers & Acquisitions started off on a strong footing, hitting a four-year high at $30.3 billion in the first quarter of 2022, bucking the global trend where deal-making fell sharply.
Deal activity grew by 5.6 per cent in value terms in January-March 2022 compared to the first quarter of 2021, making it the highest first-quarter period since 2018 when it was USD 31.1 billion.
Along with this, the major updates I think the CFO community should know is, this week the Institute of Chartered Accountants of India (ICAI) has issued a detailed set of instructions to auditors to ensure that the financial statements of companies they audit comply with the government’s new investment reporting requirements. The Institute wants the auditors to keep a watch on the lending in companies to ensure that they adhere to the PMLA and FEMA regulations.
https://cfo.economictimes.indiatimes.com/news/india-inc-cracks-blockbuster-deals-in-jan-march-2022/91197730
