India saw 38% increase in M&A activity, deal contribution by domestic firms doubled in CY24: Kotak Investment Bank

India saw a 38 percent increase in M&A activity from $79 billion last year to $109 billion in CY24, reflecting investor confidence.Also, after a brief slowdown last year, Indian conglomerates are again active in sectors with a focus on diversification and strategic expansion, with deals investment almost doubled in CY24 to $48 billion from $26 billion last year, said W Jayasankar, Executive Director, Kotak Investment Bank.

The bank also said that CY24 saw the highest ever fundraising in Indian capital markets at $74 billion and the momentum is expected to continue this year with an IPO pipeline of $35 billion. 40 percent of primary funds come from IPOs Fund-raising activity in India has been particularly broad, spanning all sectors, unlike global capital markets such as the US, which are often dominated by a few major industries such as technology, healthcare or financial services.

It also highlighted how the domestic equity pool provides stability to the volatility of FII flows.According to the bank report, domestic investors contributed a total of $62 billion, of which 50 per cent came from SIPs, compared to 0.4 billion from FIIs in CY24. per dollar.Also, demat accounts increased to 18 million by October 2024, mostly from non-traditional states like Bihar, Uttar Pradesh, Madhya Pradesh etc. cap companies. IPOs gave a strong average return of 32.8 per cent in CY24.

Another trend the bank noticed was MNCs preferring India as a listing destination, listing their Indian subsidiaries or shifting their corporate office to India or consolidating their global business under one Indian entity for listing. Sales declines in CY24.Hyundai’s success has led many MNC conglomerates to consider unlocking value through India IPOs.MNCs are increasingly looking at Indian public markets as a viable avenue for monetization.

The Hyundai Motor India IPO, valued at $3.3 billion, was India’s largest IPO to date.Hyundai’s shares were listed on the Indian stock exchanges in October last year, with the stock listed on the BSE at Rs 1,931, a 1, 1,960 per share at a discount of 5 percent.Hyundai shares are currently trading at Rs 1,787 on the BSE.