Naan Irrigation

Although the financial turmoil in international markets has not yet been resolved, it is interesting to return to an overview published prior to the outbreak of the storm regarding foreign investment in India and Indian investments abroad in 2007, and perhaps to establish a measure of optimism about him.

From the Israeli perspective, and many other parts of the world, India is seen as an investment opportunity. Grant Thornton annual review of mergers and acquisitions indicates that Indians identified themselves as many global investment opportunities: Indian companies invested $ 32.8 billion in mergers and acquisitions outside of India while the total value of foreign investments in mergers and acquisitions within India came to $ 15.5 billion. In addition, the total value of private equity transactions in India has reached
$ 19 million.

The total amount of mergers and acquisitions (including those in which only Indian entities have participated) and private equity funds came to $ 70 billion, compared to
28 billion dollars in 2006 - an increase of 150%. In 2005, the sum total of these transactions amounted to 18 billion dollars, while the numbers have quadrupled in two years.



According to the survey this year, 405 private equity transactions valued at 19 billion dollars have been reported. In 2006, the total value of these transactions amounted to 7.9 billion dollars, and in 2005 to 2 billion dollars. The figures have been multiplied by 8.5 times in two years. Another study released this week by the Indian Chambers of Commerce and Industry estimates that foreign investment capital investment in India will reach 48 billion dollars by 2010, with real estate claiming the lion's share.



The leading sectors involved in mergers and acquisitions: the steel and telecommunications are clearly ahead, and together constitute approximately 50% of all transactions - noteworthy is the fact that one operation in each these sectors was responsible for the majority of investment in the sector. Real estate, banking, financial services, telecommunications and infrastructure were the leading sectors in private equity, which constitute about 70% of all investments.



The picture that emerges from the survey is clear: The number of transactions and the volume of investment is tripled and quadrupled. Commentators considered (as stated before the turmoil in stock markets of the world) that this trend will continue in 2008, and they predicted that the volume of Indian investment abroad would continue and develop a wide range of sectors.

How important is it to Israel? Among other things, that India should be considered as a possible source of investment in Israeli companies. In the past year a number of transactions have been published, including the acquisition of control of the irrigation company Naan-Dan by the Indian Society JAIN. However, the Indian presence in Israel is not yet widespread in the field of venture capital, it is virtually nonexistent. The question is whether the discovery process in the Indian corporate sector in the world, Israel succeeds in winning the Indians' interest in its potential, despite current circumstances.

The writer is bureau chief to India Zissman, Aharoni, Geier and Adi Kaplan Law Firm


By: Danny Segal lawyer