Favourable demographics make India an attractive destination for M&A activities: E&Y

New Delhi: Favourable demographics and growth opportunities are the factors that make India an “attractive” destination for merger and acquisition (M&A) activities across diverse sectors including consumer goods and pharmaceuticals, according to Ernst & Young (E&Y), a global consultancy.

“Catering to a growing, expanding and spending population is what every organisation wants to do. So, there is a lot of interest from outside India to come inbound,” as per Ms Phillipa McCrostie, Global Vice Chair (Transaction Advisory Services), E&Y.

“I don’t think India’s growth is based on one factor or bubble that has evaporated and gone away. It is exciting time in India for M&A growth,” Ms McCrostie added.

India’s wonderful population and demographics are attracting a huge amount of interest around industries such as consumer goods, pharmaceuticals and life sciences, among others.

She expects India to continue to be an attractive M&A destination in a sustainable way going forward as there is widespread interest from the US, Europe and others.

She noted that the country is becoming all the more attractive destination with reforms coming through.

“India has to be one of the most attractive investment destinations. Look historically, what India has achieved... If you compare other countries, many don’t have the population, stability that India has been trying to produce in the last ten years,” she added.

McCrostie said that investor pressure is also steadily growing over the time on companies’ growth strategies. “It is translating into what we see as green shoots for some more M&A activities. So to be clear, no boom activity, no bubble activity... But a slow, steady increase in M&A activities is one of the means of achieving growth,” she said.

The “green shoots” for M&A also depends on sectors as well as geographies, she added. Going by E&Y, India is poised to be among the top five M&A destinations this year.

In 2012, BRIC (Brazil, Russia, India and China) nations together accounted for about 15 per cent of global M&A market by value.