Foreign acquisitions by India Inc: All looking for right target

Most of these firms are keen on foreign expansion, largely through acquisitions, and would also expand domestically through both organic and inorganic routes.

This assumes significance in the wake of government leaders from a number of countries, including the UK, other European nations, African countries and even India, announcing here at the Davos that their respective economies offer robust business environment and want greater level of investments.

A number of Indian CEOs and other top executives held a series of private meetings including to explore M&A deals here on the sidelines of the World Economic Forum summit.

According to various sources privy to such discussions, about 10-15 such prospective deals can fructify in coming months including in sectors like IT, pharma, energy, healthcare, education and manufacturing.

Many top executives on the sidelines of WEF, however, said any acquisitions would be carried out only at the right time and right value. Natarajan Chandrasekaran, CEO and MD of India's largest IT company, TCS, with a revenue of over $11.6 billion, said the company believes in strategic acquisitions and it would not take the plunge just because of its cash position.
‘Our strategy for acquisition is more to do with buying the right company, as we look for strategic acquisitions, we are not for buying companies for revenues. So, it will not depend on how much cash we have and it will rather depend on whether we find some strategic assets,’ he said.

Asked whether anything was on radar right now, he said, we are always on the lookout, but anything like this would most likely be outside India.
Another Indian IT major Tech Mahindra's vice chairman Vineet Nayyar said that acquisitions were a way of life and a part of business growth at the company.

‘Either you grow organically or inorganically. But it can not be a major milestone in any fashion. These decisions are similar to multiple business decisions that the management takes,’ he said.

Asked whether there was anything on the radar at the moment, he said: ‘There are always possibilities, but they would lead to what and when that we don't know. So, at times it could take months and it can take even two years. Nothing can be said.’

‘Organically everything is going great and we are hopeful that we will get the expected results,’ he added.

Financial services conglomerate Kotak group chief Uday Kotak also said he was open to acquisitions, including in the banking space.
‘I am very open if I get the value. In non-banking businesses also, we are always open to acquisitions at right value and right time,’ he added.
Auto major M&M's executive director and President (automotive and farm equipments business) Pawan Goenka said that Indian companies are not shy of making big bets in overseas markets. ‘All major business houses have gone outside, some of them have worked, some may not have had. But, they are not shy of big bets and they will have to do so. They can not grow outside India just by exporting products and services from our country,’ he added. Mahindras are a $7 billion multinational group employing over 185,000 people in over 100 countries. Goenka further said Indian companies need to invest in foreign countries, either through organically setting up plants or through acquisitions, for their expansions.
‘That is happening at Indian groups, including at Mahindra. We have acquired Ssangyong, and besides we have made many other investment overseas in areas like component, parts and IT.

‘We believe that our growth cannot be only organic or only inorganic. We are clear about it. At the same time we are very disciplined about it. We don't mind waiting for the right opportunities for long, long times, but when the right opportunity comes,
we go for it.

‘Within India and outside India, we have so far made three major M&As, including Ssangyong outside and PTL and Satyam within the country. All three have worked quite well.
‘We keep looking for the opportunities and will take it forward whenever something interesting comes up,’ he added.

TCS' Chandrasekaran said his company's business model is a global one and it would continue to pursue the same. On Indian IT companies' prospects of joining the big global league, he said, ‘TCS is doing very well. You may need to grow in scale too, but for us the most important thing is to be able to work with customers across the world, who are our strategic partners, and that is what we desire to do and we are doing is successfully.’