McKinsey to set up a focused practice in India

Global consulting firm, McKinsey and Company, is setting up a focussed practice for corporate finance in India, in view of the increasing interest in the country as an investment destination.

According to Richard Dobbs, partner, Mckinsey and Company, "In the last six months to one year, many of our clients have expressed huge interest in Indian companies. Many Indian companies are also looking at acquisitions abroad, which has mooted the decision to begin a focussed practice here."

Adil Zainulbhai, managing director, Mckinsey India, reiterated the trend of Indian companies looking to make overseas acquisitions.

"Companies across sectors are looking to invest in manufacturing units as well as research operations, in destinations from across Europe to East Africa," he said adding that the practice would be entirely India-centric, dealing with multi-nationals interested in mergers or acquisitions in India, and Indian companies looking at investments overseas.

He also said that many mid-size companies notably pharma, auto-parts, IT services, as well as banking was seeing major activity.

Vivek Pandit, Principal, McKinsey, pointed out two major factors for the development.

He said that firstly, boards of many companies were actively considering India in their discussions, especially in the case of IT and related fields.

On the other side, the high cash and equity values of companies, was a driver for Indian companies to expand their scope, through mergers and acquisitions.

Dobbs said that one of the essential challenges of the business would be to ensure the buyer captures the maximum value. Pandit further elucidated, "Investor communication is vital for the company, in order to capitalise, and is essential from the investors point of view as well."

He indicated that the sellers side is increasingly catering to the hedge funds.

The company, which started its Indian operations in 1992, has only now formally launched the practice in the country, and would initially tap its global pool of consultants.