JPMorgan expects another busy year for dealmakers in India

Dealmakers in India should expect another strong year for mergers and acquisitions as geopolitical tensions could propel companies to diversify into the country, according to JPMorgan Chase & Co.

India sealed its busiest M&A year ever with about $191 billion worth of transactions in 2022, bucking a global slump in deal activity, according to data compiled by Bloomberg. While it’s unlikely for the country to repeat such a high mark this year, there will be decent deal flow to keep the bankers busy, said Nitin Maheshwari, JPMorgan’s head of M&A for India.

“China has been a bit difficult to deploy so where can these managers go?” Maheshwari said in an interview. “You can go to Australia and Japan which are both competitive in terms of capital. That’s why more capital will continue to flow into India which is the biggest market for some global sponsors.”

India — and its fast-growing economy — has emerged as a big bet for global financial firms, even though recent troubles at billionaire Gautam Adani’s business empire have dented the allure. At the same time, China is struggling to attract capital after the nation’s protracted Covid Zero policy and a crackdown on private enterprise, including on its biggest tech firms, stunted the economy over the past years.

Smaller transactions will drive deal flow in India this year with the majority being in the range of $500 million to $2 billion, Maheshwari said. Health care, energy and infrastructure, specialty manufacturing and technology are expected to be fairly active, he added.

“Corporate clarity, financial sponsors and switch from public to private track will likely be the three key drivers for M&A this year,” he said.