Citigroup India Executive Foresees Surge in M&A Activity, Fueled by Global Investments

Citigroup Inc.'s top executive in India anticipates a surge in merger and acquisition activities within the country this year, fueled by investments from sovereign wealth funds and regions like the Middle East.

Rahul Saraf, head of Citi's India investment banking, highlighted the expected growth, encompassing a spectrum from outright acquisitions to greenfield projects and partnerships.

In an interview with Bloomberg News in Mumbai, Saraf identified potential sectors for increased dealmaking, including industrials, manufacturing, information technology services, and insurance, along with possible consolidation among shadow banks.

The momentum in deal volume is attributed to financial sponsors, pension funds, and sovereign wealth funds from the United States, Canada, and Singapore acquiring controlling stakes in Indian infrastructure companies, real estate, and green energy.

The buoyant stock market, with the benchmark Sensex advancing for eight consecutive years, contributes to this trend.

Saraf expressed optimism about India's trajectory, stating, "India is moving to a different orbit," and emphasized the country's ability to attract capital irrespective of China's economic performance.

The Middle East also plays a pivotal role in the growing investment landscape, with the United Arab Emirates contemplating a substantial investment of up to $50 billion in India, as reported by Bloomberg in November.

Potential contributors include sovereign wealth funds like the Abu Dhabi Investment Authority, Mubadala Investment Co., and ADQ.

Saraf predicts increased interest from Middle East funds in acquiring Indian infrastructure, digital, and industrial assets, anticipating a higher influx of funds compared to previous periods.

Source: Baiju Kalesh / BNN Bloomberg