M&A to generate $8 billion in FDI in 2007
23 Jan 2007
New Delhi: According to a report by the Institute of International Finance, global corporate giants' M&A activities in India will lead to substantial direct investments in India, possibly up to $8 billion, in 2007.
The report says, "The high performance of the Indian economy and the improving policy environment are expected to contribute to an acceleration in direct investment this year to $8 billion from $6.5 billion in 2006."
The report forecasts that direct investment would rise to $211 billion this year -- the highest level recorded from the $185 billion recorded in 2006. It says the continued rise in equity prices has provided a significant boost to the value of cross border mergers and acquisitions, which has led to increased investment by investment, private equity and hedge funds.
With low interest rates and increasing financial integration playing a positive impact, funds shored in by the private equity firms to undertake direct investment in emerging markets is set to create huge inflows, the says.
The Institute of International Finance is a global association of financial institutions.
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