From The Economic Times · Saloni Shukla · · 1m 20s
Indian Banks Fuel ₹10,000 Cr M&A Deals Post RBI Rule Change
Indian banks now finance up to 75% of M&A deals after RBI eased takeover rules.
In brief
Indian banks now finance up to 75% of M&A deals after RBI eased takeover rules. Indian banks secured ₹10,000 crore in M&A funding following RBI's July 1 rule change allowing domestic lenders to fund 75% of acquisitions. Originally reported by The Economic Times.
RBI Rule Change
Indian banks have financed about a dozen M&A deals involving more than ₹10,000 crore in acquisition funding after the central bank eased takeover-financing rules effective July 1.
Bank Participation
State Bank of India, HDFC Bank, Kotak Mahindra Bank, ICICI Bank, Axis Bank, RBL Bank, HSBC, Citibank, MUFG, and Barclays have participated in acquisition financing.
Funding Percentage
Domestic lenders can now finance up to 75% of the independently assessed acquisition value, including eligible acquisitions of listed and unlisted companies.
Kotak Mahindra Bank
Kotak Mahindra Bank's Anu Aggarwal states demand for acquisition financing is picking up with over a dozen transactions closed since July.
Key Deals
Crystal Crop Protection acquired ₹2,268 crore from FMC Corporation's India business, Waaree Renewable Technologies bought ₹1,225 crore stake in Associated Power Structures.
Market Potential
Industry estimates peg the potential acquisition-financing market at nearly ₹2 lakh crore with annual M&A deal values averaging close to $50 billion.
The big picture
Indian banks secured ₹10,000 crore in M&A funding following RBI's July 1 rule change allowing domestic lenders to fund 75% of acquisitions.
