Global buyout funds targeting India, says Nomura

Nomura expects these acquisitions to be carried out through both primary and secondary markets, mergers and acquisitions as well as financing. 

Nomra has cited instances like last week’s deal by the country’s biggest renewable power producer, ReNew Power, at an enterprise value of $8 billion. 

Similarly, Online grocer Grofers is also looking to list in the US through merger with a blank-cheque company, according to a Bloomberg News report.

Blank-cheque firms are shell companies living on money raised from public investors or sponsored fronts of the cash rich looking to expand their business ownership by buying out growing and promising enterprises. 

Besides the major global funds from the US, buy-out groups based in Hong Kong, Singapore, Mauritius etc are looking for opportunities to acquire businesses, mostly in growing markets like India, according to Nomura.

The Singapore Stock Exchange is consulting the market on allowing special purpose acquisition companies (SPAC) to go public, so that they could get enough backing  for deals, and, as Nomura says, at least 10 Indian companies could go public through SPAC deals before the end of the year and the trend could accelerate if Singapore allows listing of blank-cheque firms. 

Nomura also cited market deals by the rich and influential like Hong Kong billionaire Richard Li and ex-Credit Suisse chief Tidjane Thiam who have raised more than $66 billion in the US alone this year, as per Bloomberg data.

Nomura also expects more initial public offerings in India this year after last year’s mop-up of $4.6 billion in IPOs, as the market sentiment is supportive of investments in promising companies.

New shares listed in 2020 are now trading more than 50 per cent above their IPO prices on average, as per data compiled by Bloomberg. 

Indian companies have so far this year raised about $1.7 billion, while State Bank of India is preparing to raise $1 billion by listing its mutual fund joint venture. Bloomberg adds.