MNC IPO Activity to Remain a Key Theme in Indian Market, Citi Analyst Predicts

Global Private Equity Giants Eye Control Deals in India

Global private equity heavyweights are on the prowl for control deals or buyouts in India, with financial services, healthcare, hospitals, consumer, and energy transition being some of the key sectors on their radar. According to Kaustubh Kulkarni, head of investment banking, Asia-Pac at Citi, these investment majors are looking to capitalize on India's growing economy and large market potential.

Growing Interest in MNC Listings

Kulkarni also expects more multinational corporations (MNCs) to list their arms in India, following the successful listings of Hyundai Motors and LG Electronics. "MNCs have built firms at scale. Those businesses have a very relevant and successful India-oriented business model and are operating at scale with excellent profits," he said.

Read also: UK Business Secretary Faces Scrutiny Over Lack of Timeline for India Trade Deal Amid Steel Industry Dispute

Asia-Pacific Region Deal Activity

In the Asia-Pacific region, Kulkarni expects deal activity to remain robust, driven by the growth of the Indian economy and the increasing interest of global investors in the region. "Each of the markets for us in Asia has been very active. The themes and the drivers for those are different, but nevertheless, the deal activity and momentum remain very robust for us," he said.

Geopolitical Tension and Cross-Border M&A

Despite geopolitical tensions, Kulkarni believes that cross-border M&A conversations are actually increasing, driven by the need for companies to diversify their supply chains and invest in new markets. "If you are a Western company invested in Asia or an Asian company looking to do more, I think you are going to see more investments, both in terms of M&A and financing," he said.

Read also: SME IPOs Defy Market Volatility, Iran Tensions with Strong Performance

Indian Market Attractiveness

Kulkarni believes that India remains an attractive investment destination, despite the recent sell-downs by foreign institutional investors (FIIs). "FIIs continue to be invested in India in a very meaningful manner. Yes, they are selling some of their holdings, but FIIs have also been generally selling their holdings in some of the emerging Asia and Asian markets as well," he said.

Private Equity Investment in India

Kulkarni expects private equity investors to continue to invest in India, particularly in sectors such as financial services, healthcare, and energy transition. "From an India market perspective, consumer is a very structurally solid theme that will continue to play out for a long period of time. The other area is energy transition, because I think energy transition has always been a core theme or topic in the Indian context," he said.

MNC IPO Activity

Kulkarni believes that MNC IPO activity will continue to be a relevant theme in the Indian context, driven by the growth of the Indian economy and the increasing interest of global investors in the region. "MNC companies have built firms at scale. Those businesses have a very relevant and successful India-oriented business model and are operating at scale with excellent profits," he said.

Outbound M&A

Kulkarni expects Indian companies to continue to engage in outbound M&A, particularly in sectors such as pharmaceuticals and technology. "Indian companies will look at M&A and particularly outbound M&A, if that investment makes immense sense strategically and financially for them," he said.

IPL and Global Investors

Kulkarni believes that the recent sales of RCB and Rajasthan Royals to global investors have put Indian sports and cricket on a global roadmap. "It has put Indian sports and Indian cricket on a very global roadmap. What we are seeing is effectively getting institutional capital as well into sports, which is always good from an India perspective because we do want more of that to happen," he said.