A growing ease in raising finances, whether in domestic or in the overseas markets, combined with the surging demand for quality products in the domestic market, Indian entrepreneurs would embark on more acquisitions in the overseas market, business leaders said in New Delhi on Tuesday.
Not only has the number of acquisitions done of the Indian companies increased significantly in the last couple of years, the average ticket size has increased three-fold since 2002, said Neeraj Bhardwaj, country head of a private equity firm Apax Partners at a session on "Going Global: The Acquisitive Indian", at the India Economic Summit organised jointly by the World Economic Forum (WEF) and the Confederation of Indian Industry (CII) in New Delhi.
Minister of state for industry Ashwini Kumar said that the Reserve Bank of India (RBI) has progressively eased norms for capital outflows which has enabled Indian companies to integrate themselves to the global economy.
"The mobility of capital flows from overseas is proof of the fact that there is financial muscle inside the economy," said Kumar.
Overseas acquisitions by Indian companies have increased from $1.7 billion in 2004 to $4.5 billion 2005, and are expected to double during the current year.
UB Group chairman Vijay Mallya said that Indian corporates have better management depth and understanding in term of managing business in the overseas countries.
"As long as there is mutual respect and confluence of best business practices between the acquirer and the acquiree, any acquisition will work," said Mallya.