November 14, 2023
Cross-border merger and acquisition (M&A) dealmaking continues to gain traction, with India representing a compelling investment opportunity for German companies. The country recorded 194 deals in Q1 2023, at an aggregate deal value of US$19.6 billion, driven by a unique combination of market size, market potential, and talent pool.
As India’s influence continues to rise, Translink Corporate Finance’s newly established partnership with SMC Capitals, serves as a gateway for ambitious German clients aiming to leverage the region’s rapid growth and abundant opportunities, especially in environmental technology, renewable energy, digitalisation, Industry 4.0, and sustainable infrastructure.
Why invest in India?
For German investors, the Indian market presents vast growth prospects. A unique combination of market size, market potential, and talent pool is translating into a wealth of M&A opportunities, corporate finance possibilities and cross-border transactions with the region. Furthermore, India’s geographic advantage not only grants access to its vast market but also opens doors to neighbouring markets in South and Southeast Asia.
Growing Germany-India bilateral trade
The German-Indian Business Outlook 2023 reveals that bilateral trade between Germany and India grew significantly for the second consecutive year in 2022 (+28% y-o-y), reaching an all-time high. This occurred against the backdrop of a volatile global economy, in which by contrast the Indian economy has performed well so far, overtaking the UK to become the fifth-largest economy in the world in 2022.
Investment from Germany to India has grown significantly since 2021, making Germany the seventh largest direct investor. More than 2 000 German companies in the automotive, industrial, and chemical sectors are already present in India.
German companies in India are very optimistic, both for the current 2023 financial year and the medium term. Just over 70% expect an increase in revenues generated on the subcontinent, and 48% expect an increase in profits. The five-year outlook is incredibly positive, with 83% expecting revenue increases and 73% expecting profits to increase.
This outlook goes hand in hand with ambitious plans for investment compared to 2021. By contrast, just 11% of companies expect a decline in revenues for 2023, while just 6% expect this to be the case by 2028.
Translink and SMC Capitals – Germany’s Indian partner
Achieving these ambitions is within reach thanks to the expert advice provided by Translink and Translink’s partner in India, SMC Capitals. Petra Fischer, Partner at Translink Corporate Finance Germany said, “With our new India-based office, we are strategically positioned to support our clients inorganic growth opportunities. German businesses are increasingly seeking fresh opportunities and as a result, India is rapidly gaining significance and coming into focus. We observe significant growth opportunities specifically in the domains of environmental technology, renewable energy, digitalisation, industry 4.0 and sustainable infrastructure.”
SMC Capitals, headquartered in Mumbai, specialises in M&A and has strong credentials backed by its strategic advisory and capital-raising services. Its robust presence in the mid-market, coupled with longstanding financial sponsor relationships, provides a unique advantage. With an extensive team experience spanning more than 50 transactions across crucial sectors like infrastructure, industrials, and healthcare, the company stands out with a strong pedigree, knowledge capital, and a solid network of relationships.
While doing business in India comes with its own cultural and professional nuances, SMC Capitals’ local connections and regional expertise offer a unique differentiator. While complex regulatory challenges exist, understanding local practices and forging strong local partnerships remain vital for navigating the Indian market successfully. Translink is perfectly poised to open doors to the opportunities for German investors seeking sustainable, long-term advantages in this vibrant economy.