2016—PROMISES MORE ROBUSTNESS

•   The year 2016 promises to be a more robust year for M&A, supported by an active domestic market.  The government’s push to develop India as a global manufacturing hub, the impending introduction of a new bankruptcy regime and a more liberal foreign direct investment (FDI) policy are expected to boost M&A deal making in current financial year onwards. 
•   In 2015, the Indian M&A market registered a slower performance compared to 2014.  This was due to various factors, including a volatile rupee.  Deal-making in the information technology, energy, mining and utilities sectors was comparatively higher.  M&A activity was primarily driven by cross-border inbound transactions, with investors from Japan and the US taking the lead.

A number of deals displayed so-called earn-out structures.  The competition regulator showed an unprecedented level of activity as if received notifications in respect of a number of transactions.  The securities market regulator introduced significant regulatory changes aimed at making going- private transactions easier.  The government also worked hard to dissipate concerns around retrospective taxation.  Overall the M&A market was consistent with the slow and steady growth of India in 2015.