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With twice the deal volume and eight times the deal value of 2009 first half transactions, US-bound acquisitions by Indian companies in the first half of 2010 have surpassed all expectations. There were 23 US-bound acquisitions by Indian companies with an aggregate value of over $3.8 billion in the first half of 2010.
Robust economic growth and a surge in demand for natural resources in India combined with high debt-to-equity ratio and lower earnings potential of US companies is creating value-buying opportunities for Indian companies in the US. In addition, increasing domestic competitive pressures, changing economic realities and improved US-India political relations are encouraging Indian companies to seek acquisitions in the US. This also reflects how Indian companies adapted to the new economic realities and are opportunistic about global growth. |
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| The Indian healthcare industry is estimated at $35 billion and is expected to reach over $75 billion by 2012. The medical equipment market is growing at a rate of 15 percent and the demand for equipment is expected to reach $5 billion by 2012 from the current figure of $2.7 billion. Both the government and the private sector have embarked on a path to bring about a rapid growth in the industry and to manage the demand for high quality service. This has also brought a surge in demand for high-end medical devices and equipment as the specialty hospital facilities depend on the import of high-end medical equipment. | |
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| India with a population of 1.16 billion provides a large and growing market for food products. India is amongst the three largest producers of agricultural commodities in the world. In addition, food is the single largest component of private consumption expenditure, accounting for about 37.8% of the total spending. Growing at about 14%, the processed food industry has started attracting increased investment to cater to both, the domestic and export demand. |
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| India continues to offer great investment opportunities not only in the knowledge sectors, but also in more traditional sectors such as manufacturing, banking, pharmaceuticals and telecom which are likely to attract significant amounts of investment. Deal Structuring parameters in India are driven by factors such as exit, valuations, currency risks, tax consideration and government regulation. |
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| India has targeted 20GW of Solar Power by 2022 in its Jawaharlal Nehru National Solar Mission. With more than 300 days of sunshine annually and a large customer base, India offers a great potential for off-grid PV deployments such as rural lighting and electrification, powering irrigation pump sets, back-up power generation for cellular towers, captive power generation, urban applications and highway lighting. This, combined with investor friendly policies and solar energy promotion, provides the right platform for growth. |
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| India has the fifth largest generation capacity in the world with an installed capacity of 152 GW as of 2009, which is about 4 percent of global power generation. The average per capita consumption of electricity in India is estimated to be 704 kWh during 2008-09. In order to provide availability of over 1000 units of per capita electricity by year 2012, over 100,000 MW of capacity addition would be required. This has resulted in massive addition plans being proposed in the sub-sectors of Generation Transmission and Distribution. |
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| By adopting an international competitive bidding process, allowing external commercial borrowings, and facilitating statutory clearances the government of India has opened up opportunities in the infrastructure and energy sector as never seen before. This presents a compelling opportunity for US project developers, infrastructure and power equipment companies as well as financial investors. |
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| With a compounded annual growth rate of 19%, the radio broadcasting industry is estimated to double from the current US$ 170 million to US$ 350 million by 2013. This sector promises consistent high growth and hence an ideal India investment opportunity for US firms. |
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| With a total market size of $5.6 billion and an average growth rate of 18 percent per year in passenger and air cargo over the last five years, the civil aviation sector in India has witnessed a rapid development. This growth will spur increased investment in airports and ground equipment |
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| With a rapid growth in the manufacturing sector and heavy investments in infrastructure, the $1.2 billion Indian composite industry is expected to grow at a rate of around 25% in the next 4-5 years. The key drivers of this growth will be transport, infrastructure, wind energy, and oil and gas industries in India. |
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| With a generation capacity of 141 GW, India has the fifth largest electricity generation capacity in the world. The estimated energy requirements in India will reach approximately 950,000 MW in the year 2030. Given these conditions, there are excellent prospects for North American companies in energy efficient compressors, boilers, turbines, heat recovery technology, and heating/cooling (HVAC) systems. |
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| With a market size of over $4 billion, the Indian water and wastewater market is growing at a rate of 10-12 percent every year. Government related projects contribute over 50 percent of revenues in this market while the private sector contributes the rest. The water and wastewater treatment market segment is highly fragmented and unorganized. Imports constitute approximately $110 million of the $690 million market for municipal and industrial water treatment equipment. |
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| By 2025, India's middle class will expand more than ten times from its current size of 50 million making it the 5th largest consumer market globally. The top prospects for U.S. firms include: retail, education, garments and apparel, specialized food services, entertainment, courier services, stationary and gift shops, healthcare, fitness and personal grooming services. |
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