India To See Record Spurt In Billion Dollar Tech Deals: Top Advisory Firm

The "realization is setting in that India is too strategic a market to be underweight," says an expert.

The technology industry will see more billion-dollar acquisitions as the next big battleground for foreign Internet companies, according to boutique advisory firm Raine Group LLC.

The e-commerce, financial technology and emerging media sectors will see strong deal activity, said Gaurav Mehta, the country head at Raine, which advised on two biggest domestic tech deals this year. Companies have also started to see the logic of consolidation even in high-growth markets like India, Mehta said in an interview last month.

Walmart Inc. agreed in May to buy control of Flipkart Online Services Pvt for $16 billion in the world's biggest e-commerce takeover this year. Last month, billionaire Warren Buffett's Berkshire Hathaway Inc. agreed to invest in the owner of digital payments leader Paytm.

"The largest companies in the world are playing a very active role in how the sector landscape evolves in India," Mehta said. "M&A driven by more strategic, long-term factors is seeing record activity."

Internet Penetration
New York-based Raine -- which focuses on tech, media and telecom deals -- ranks fourth among advisers on takeovers involving Indian companies this year, the data show. Its investment arm, which runs private equity and venture capital funds in addition to a hedge fund, has more than $2.5 billion of assets under management, according to its website.

The boutique advisory firm, which opened its Mumbai office last year, advised one of Flipkart's backers on the internet retailer's sale to Walmart, data compiled by Bloomberg show. It also worked with an Indus Towers Ltd. investor on the company's merger with Bharti Infratel Ltd., which will create a $14.6 billion wireless infrastructure operator in the second-biggest tech deal of the country this year.

Global technology companies are being drawn to do deals in the country as mobile internet penetration increases and digital payments boost consumer spending, Mehta said.

"For a number of years, global strategics sat on the sidelines," he said. The "realization is setting in that India is too strategic a market to be underweight."