India saw 38% increase in M&A activity, contribution of domestic companies doubled in deals during FY24: Kotak Investment Bank

India saw a 38 per cent increase in M&A activity, rising from US$79 billion in the previous year to US$109 billion in 2024, reflecting strong investor confidence. V Jayasankar, Managing Director, said that after a brief slowdown last year as well, Indian conglomerates are once again driving significant activity across sectors, with a focus on diversification and strategic expansion, with their contribution to deals nearly doubling in FY24 to $48 billion from $26 billion. dollars in the previous year. Kotak Investment Bank.

The bank also said that FY24 witnessed the highest ever fundraising in the history of Indian capital markets at $74 billion and the momentum is expected to continue with an IPO pipeline of $35 billion this year. Companies continue to look to IPOs as a source of capital expenditure funding, with 40 percent of seed money coming from IPOs. According to the investment bank, fundraising activity in India has been remarkably broad, covering all sectors, unlike global capital markets like the US, which are often dominated by a few key industries such as technology, healthcare or financial services.

He also highlighted how the domestic capital pool provides stability to fluctuations caused by FII flows. According to the bank’s report, domestic investors contributed a total of US$62 billion, of which 50 per cent came from strategic investment programmes, compared to US$0.4 billion from FIIs in 2014. Demat accounts also rose to Rs 18 lakh crore by October 2024, Mainly from non-traditional states like Bihar, Uttar Pradesh, Madhya Pradesh etc. The capital market in India witnessed strong performance across all major sectors with diversified market returns across small, medium and large caps. Cover companies. Initial public offerings in 2024 achieved strong returns of 32.8 percent on average.

Another trend observed by the bank is multinational companies preferring India as a listing destination, listing their Indian subsidiaries, moving their offices to India or consolidating their global businesses under a single Indian entity for listing. Multinational companies are also increasingly monetizing their holdings, contributing nearly a third. of sales in CY24. Hyundai’s success has prompted many multinational companies to consider unlocking value through IPOs in India. Therefore, multinational companies are increasingly looking at Indian public markets as a viable route to income generation.

Hyundai Motor India’s $3.3 billion IPO was India’s largest IPO to date. Hyundai shares made their debut on Indian bourses in October last year and the stock was listed at Rs 1,931 on the BSE, a 1.5 per cent discount to the issue price of Rs 1,960 per share. Currently, Hyundai shares are trading at Rs 1,787 on the BSE.