According to Charles Barlow, head of strategy execution at Investec Bank, 2024 promises to be a pivotal year for mergers and acquisitions (M&A) following a period of significant uncertainty. “Uncertainty leads to a slowdown in M&A,” he stated, emphasizing the challenges faced this year. Investec, a dual-listed entity on the London and Johannesburg stock exchanges, is known for its investment banking and brokerage services, extending its reach to markets like India and beyond.

Barlow elaborated that the conclusion of numerous elections across major economies—including the US, UK, Germany, France, South Africa, and India—should pave the way for greater clarity in the global M&A landscape. Regardless of the election outcomes, he anticipates a more stable environment that will invigorate M&A activities as we transition into 2025.

Turning to the Indian market, Vikram Surana, head of corporate finance and equity capital markets at Investec Capital Services in India, noted that a cooling trend in the primary capital markets may catalyze M&A momentum. “We are observing a slowdown in the IPO market. As public markets temper, we expect a shift toward M&A and heightened private sponsor activity,” he explained.

Historically, Indian M&A and private equity activities have remained stable, hovering between $60 billion to $100 billion annually. Surana predicts this trend will persist, with a growing influx of private equity investments across sectors such as manufacturing, capital goods, defence, packaging, chemicals, pharmaceuticals, and IT services.

Investors are responding well to the Indian market, with returns between 30-40% on investments. This success is driving increased interest from private equity firms seeking to capitalize on large-scale opportunities in the country. Additionally, Indian companies are increasingly pursuing outbound acquisitions, typically in the range of $100 million to $300 million. Barlow emphasized that these tuck-in acquisitions allow firms to strategically merge smaller companies into their divisions.

From a global perspective, investing in India remains a tantalizing proposition for international investors seeking robust market access. “Investing in India means you’re tapping into a market of 1.5 billion people without the need to spread investments across 20 different countries,” Barlow remarked.

Over the past five years, Investec has executed between 40-45 transactions in India, averaging around eight to nine deals annually within the private markets. In collaboration with SBI Caps, they have facilitated $6 billion in transaction volume in the IPO sector alone, with an additional $6 billion being invested through private credit efforts.

As we look ahead, the combination of political clarity and market evolution paints an optimistic picture for M&A activities in 2024, positioning India as a thriving hub for investment and growth. Could this be the year that reshapes the future of global business transactions? Only time will tell!