Jyoti Prasad, Head (Investment Banking), Asit. C Mehta, spoke to Ujjval Jauhari on the markets.
 
Recently we have seen large merger and acquisitions such as Intel-McAfee, Cairn - Vedanta deal etc. Are big ticket buyouts back in vogue after the economic downturn?
 
Big ticket buyouts will not be pursued, as with any other buyouts, if there is no economic logic underlying those buyouts. 
 
Such buyouts have often been supported by the availability of acquisition funding from the banking system. To that extent it becomes easier to put through a large deal when funding is easily available.
 
Even in a recessionary phase, a company that has significant cash in its balance sheet may go after an acquisition target provided it meets its strategic objectives.  So, I would hesitate to read into a one-off big buyout as signaling an end to the economic downturn.
 
Would you say that the worst is behind us, or are there chances of a double dip recession?
 
The overall sentiment is cautious; celebrations may be premature in the absence of strong indicators pointing to either countries or markets being completely out of recessionary situations. There are no indicators to support a double dip recession either.
 
Which sectors are being possibly targeted for M&A, and which for private equity investment? Why?
 
M&A and private equity happen due to different compulsions and are driven by different orientations. M&A is between companies, usually for strategic reasons, while private equity is an investment decision led foremost by return considerations.
 
Some sectors are structurally more likely to lend themselves to heightened M&A activity such as the case of cellular telephony or airline services where fragmented market share means that most players are not enjoying break-even volumes, or banking sector where consolidation would help in unlocking efficiencies and better return on capital.
 
In India, infrastructure services, specialized engineering and manufacturing; logistics, branded foods or agro products; auto components (now back in favour) continue to look interesting to PEs.
 
With an inflow of $2,073.90 million, India has topped Asia in luring foreign investments in August 2010 as per the latest available data. Do you expect this to continue?
 
India’s attraction as an investment destination will continue to appeal to Foreign Institutional Investors (FIIs) and even to strategic investors for the next few years for sure.  For FIIs, the stock markets offer a chance of thematic picks even if the broad indices run up too much from time to time.
 
India's GDP growth story continues to be interesting and irreversible and the fact that the government is conscious of the need to reduce fiscal deficit is laudable, and will improve the sentiment of foreign investors towards our markets.
 
Chinese economy has toppled Japan to grab the number 2 spot. What does it mean for the other Asian and world economies?
 
China is a formidable competitor on the one hand and a potential consuming market on the other. Indian and Chinese companies will continue to compete for specific goods and market share in the world.
 
Irrespective of whether it has become the world’s second largest economy or not, China and its growth, largely export-led, will continue.  Similarly India’s growth based on its demographics, its consumption story and domestic market will also continue.
 
How do you see the de-listing norms for multi-national companies (MNC's)? Is it a raw deal for Indian investors?
 
I think listed MNCs, have a right to decide whether they want to continue to be listed or not, depending on their respective business strategies.
 
As long as they follow the laid down procedure and price their open offer attractively so as to duly reward their minority shareholders, they should have the same opportunity to seek delisting under the code as other non-MNC Indian companies do.