Core and infrastructure sectors dominate Deal Street in 2007: IndusView

New Delhi and London: ''India has a long way to go before Mumbai resembles Shanghai, or New Delhi rivals New York. India consistently under-spends on new infrastructure even as its existing patchwork of roads, railways, airports and power and energy providers struggle to cope with India's burgeoning economy - and population,'' says Bundeep Singh Rangar, chairman of IndusView, the India-focused cross-border advisory firm. 

IndusView is an advisor to multinational companies on business opportunities emanating from India's fast growing economy. IndusView provides strategic insight, competitive intelligence, research and execution capabilities to manage large vendor and corporate finance transactions.

Year 2007 has gone down well as the year of 'The Core and Infrastructure Sectors', with the deal street transactions grossing about $40 billion from 89 deals, 10 times the value of deals in the sector in the whole of calendar year 2006. That represents 78 per cent of the total value of $51 billion from 675 deals.

''The focus towards the sectors is buoyed by the growing demand for urban lifestyle and world class infrastructure facilities which have been under pressure to come up to global standards. This augmentation is expected to cost and attract investments to the tune of $500 billion over the next five years,'' added Rangar.

''The need for world class infrastructure to accelerate growth in the Indian economy to 10 per cent will see the application of internationally applicable best practices, experienced global management expertise and technology and inflow of a resource base of incremental funds. A part of this capital resource is expected to find its way in to mergers and acquisitions (M&As) worth $54 billion in the core and infrastructure sectors in 2008, a growth of 35 per cent compared to 2007.'' said Rishi Sahai, board director, IndusView.

The combined spending on core and infrastructure sectors by both the public and private sectors accounted for about 5 per cent of Gross Domestic Product (GDP). That pales in comparison with China that spends about 11 per cent of its GDP for infrastructure development.