BackIndian CFOs expect more M&A: BOAML survey
Report says 69% of Indian CFOs will consider engaging in M&A activity in 2015, against just 22% last year and an average of 37% in the region
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Mumbai: Indian chief financial officers (CFOs) at large corporations have the highest appetite for mergers and acquisitions (M&A) in the Asia Pacific region, a survey found.
The Bank of America Merrill Lynch 2015 CFO Outlook Asia report said 69% of Indian CFOs will consider engaging in M&A activity in 2015, against just 22% last year and an average of 37% in the region.
The survey had 630 respondents from 12 countries in 2015, of which 75 CFOs from India participated this year with 59 from multinational corporations.
36% of CFOs from India said they would look at major transformational deals, while a further 20% say they expect to pursue large deals.
The more positive sentiment is also reflected in the outlook for growth. Some 93% of Indian CFOs expect growth in their company’s revenue in 2015, up from 76% in 2014 and the highest rate in the region. Indian CFOs are the most optimistic of the lot in the region, with 85% anticipating profit growth in financial year 2015-16, versus 72% last year and compared to an average of 73% of CFOs in the region.
“Quite clearly, over the last 12 months, business sentiment has improved and companies are shifting gears from battling a slowdown to preparing for a growth phase," said Kavish Arora, managing director and head of corporate banking at Bank of America Merrill Lynch, India.
Investing to grow revenues is a priority for 89% of CFOs at MNCs in India, the highest rate in the region, followed by expanding into new markets. But they are concerned about increasing debt too.
Some 70% of India CFOs expect their firms’ borrowing needs to increase this year from 2014, that’s the highest in the region and almost three-fourth of the respondents expect the cost of capital to rise over the next year.
Apart from increasing debt, slowing growth in overseas markets is also one of the key concerns of nearly half the respondents based out of India.
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