India Economic Update
Milind S. Kothari
Managing Partner
BDO India

In the current economically volatile world, the rare exceptions are the United States (US) and the Gulf region. The US is holding stable while the Gulf economy is growing at a time when globally, most economies are showing signs of slowing down or are on the brink of a recession. Against this backdrop, it is redeeming that the Indian economy is healthy and resilient with strong macroeconomic fundamentals.

India's GDP growth, which was targeted at 7% for this fiscal year (April-March 2023), has clocked at 6.3% from July to September. The highlights of the quarter were the growth of the services sector, higher investments that compensated for the shrinking contribution of the manufacturing sector, and a steady contribution from the agriculture sector, despite an erratic monsoon.

Amongst the other key economic fundamentals, inflation moderated at 6.77% (against an ideal target of 4%) in October, which should provide a breather to the Reserve Bank of India (RBI)- India's Central Bank. The RBI has been compelled to raise interest rates successively to combat inflation that is notoriously difficult to contain. However, India's balance of payments is likely to slip into a USD 45-50bn deficit in the current fiscal year against a surplus of USD 47.50bn in the preceding fiscal year, mainly because of a rising oil import bill.

In contrast, the buoyant tax collection is astonishing and is likely to exceed the budgetary estimates by nearly USD 44bn in this fiscal year. The additional tax mop-up will help fund both the extra spending on food and fertiliser subsidies and the fiscal deficit.On another note, India's merchandise exports in the first six months of fiscal 2022-23 rose 16.96% year-on-year to USD 231.88bn. India is looking at further firing up its manufacturing and export-intensive sectors through more support measures in the upcoming budget; eyeing the space created by a slowing of the Chinese economy.

After a steady erosion that wiped off nearly USD 100 since the beginning of the Russia-Ukraine war, the forex reserves show a reverse trend; adding precious dollars as the rupee-dollar equation steadies itself. The reserves rose upwards of USD 545bn in November from a low of USD 533bn in September.  

As we move closer to the end of the fiscal year, and the goalpost to achieve the budget target gets nearer; a glaring gap is seen in the national monetisation pipeline, which is likely to miss the budget estimate by nearly USD 15.50bn. The three key ministries that top the list of missed targets are telecom, railway, and petroleum. In the future, the budgetary allocation is likely to be linked to their monetisation goals to push the ministries to meet their targets.

India's infrastructure woes are well documented, but one needs to take a road trip to experience them. The World Bank’s latest report estimates that an investment of USD 480bn is required over the next 15 years to upgrade urban infrastructure. The bank pitched for a host of policy actions, including switching to a more stable, formula-based and unconditional fiscal transfer regime at both the State and Central levels. The investment in urban infrastructure and services fell significantly short of the requirement and private financing through borrowing and public-private partnership (PPP) has not attained the desired scale and volume, as only 5% of the financing needs are being met through private sources.

Interestingly, an infrastructure initiative conceived by the Prime Minister, Mr Narendra Modi, named Gati Shakti (PM-GS), has exceptionally gained consensus amongst most states. Over the past year, States and Union territories have mapped 734 of the 964 essential layers on the National Master Plan (NMP). This translates to an approximately 76% success rate, a significant boost to the ‘PM-GS’ initiative that rests on maximum data-sharing and increased stakeholdership. Noticeably, infrastructure is an important marker of political success today, the other important factor is the initiative itself, which in its fullness, would completely change the way infrastructure is planned.

On the international front, with the mantle of a steady economy in place, India took over a crucial presidency of the coveted G20 club from 1 December 2022 for a year. During its term, India seeks to prioritise the pursuit of five issues, i.e., growth and prosperity, resilient global value chains, MSMEs, logistics, and WTO reform.  

In a world that is immensely polarised in its view of the Russian invasion of Ukraine; India and Mr Narendra Modi have emerged as leaders of formidable stature. Mr Modi, in a pointed remark to Mr Vladimir Putin, the Russian premier, said that ‘now is not an era of war’. As we ready ourselves to enter the new year, 2023, the world is waiting for the Russia-Ukraine war to end for many reasons one of which being it would hopefully stem the downslide in economies and restore growth.

M & A Tracker
Rajesh Thakkar
Partner and Leader

M&A Tax and Regulatory

Deal Advisory Services

M&A in India

Between 30 September 2022 to 29 November 2022, around 70 M&A deals were announced of which 42 M&A deals were closed. The aggregate value of deals announced is USD 1749.68mn, dominated by 51 domestic deals (USD 1332.27mn) and 19 cross-border deals (USD 417.41mn).

In terms of sectors (considering only closed deals), the Health Care sector saw deals worth USD 302.64mn followed by the Industrials sector with deals worth USD 104.38mn and the Consumer Discretionary sector with deals worth USD 42.55mn.

Significant deals closed between 30 September 2022 to 29 November 2022

Target Company
Famy Life Sciences Private Limited, Eyecare Business of Taparia family
Acquiring Company
Viatris Inc
Deal Value (in mn USD)
Health Care
  • Mylan Inc. acquired the Eyecare Business of the Taparia family for USD 298.58mn (INR 24.6bn) from Famy Life Sciences Private Limited (Famy Life) in an all-cash deal.
  • As a part of the transaction, the Taparia family which had owned Famy Care Group would retain the non-ophthalmic business which will continue to grow.
Target Company
Briar Chemicals Limited
Acquiring Company
Safex Chemicals India Limited
Deal Value (in mn USD)
  • Safex Chemicals India Limited (Safex) acquired Briar Chemicals Limited (Briar Chemicals) for USD 80.95mn (INR 6.69bn) from Aurelius Equity Opportunities.
  • The acquisition of Briar Chemicals would fast-track Safex into becoming a fully integrated company, present in all industry verticals. The addition of Briar to Safex's crop protection business strengthens its position in the global agrochemicals market.
  • ChrysCapital would back Safex and work with the management on the transition and integration of the acquisition.
  • Post transaction, Briar Chemicals would operate as a subsidiary of Safex.
Target Company
Ace Creative Learning Private Limited
Acquiring Company
Vedantu Innovations Private Limited
Deal Value (in mn USD)
Consumer Discretionary
  • Vedantu Innovations Private Limited (Vedantu) acquired a majority stake in Ace Creative Learning Private Limited (Ace) for USD 40mn (INR 3.29bn).
  • As a part of the transaction, Vedantu would strengthen its offline presence, especially in tier III and tier IV towns.
  • Ace would leverage Vedantu’s technology and integrate it into offline centres to create a scalable hybrid model. With this acquisition, Ace would bring in close to 13,000 students to Vedantu's platform.
  • Post-transaction, Ace would operate as a subsidiary of Vedantu.

Significant deals announced between 30 September 2022 to 29 November 2022 but not closed

Target Company
Vector Green Energy Private Limited
Acquiring Company
Sembcorp Green Infra Limited
Deal Value (in mn USD)
  • SembCorp Industries Limited (SembCorp) via its subsidiary Sembcorp Green Infra Limited (SembCorp Green) is acquiring Vector Green Energy Private Limited (Vector) for USD 344.72mn (INR 27.8bn) from India Infrastructure Fund II.
  • The transaction will be funded through internal cash resources and external borrowings.
  • The acquisition is aligned with the group's brown-to-green transformation strategy and will bring Sembcorp's gross renewable energy capacity to 8.5 GW, closer to its 2025 target of 10 GW of gross installed renewable capacity.
  • The transaction is expected to be completed by the first quarter of 2023.
  • Post transaction, Vector would operate as a subsidiary of Sembcorp Green.
Target Company
Atha Group, Solar Power Assets
Acquiring Company
BluPine Energy Private Limited
Deal Value (in mn USD)
  • BluPine Energy Private Limited (BluePine) acquired solar power assets of Atha Group for USD 257mn (INR 21bn).
  • The acquisition would enable BluPine to support India’s energy transition by targeting 4GWs of portfolio capacity over the next 4 to 5 years.
Feature Story
Shashidhar Jayaraman
Chief Business Officer
Tax Tech & Outsourcing

Technology - Shaping the future of business

The advent of technology has cemented the way for various technological innovations which have been the driving force in turning this shift to a digital environment, a sustainable and economical business endeavour.

As business leaders explore new ways to stay relevant and profitable, technology is playing a huge role in changing the way companies operate. Leaders today, need to be aware of the latest technology trends and need to be able and ready to adopt more relevant, new-age solutions to gain competitive edge and scale up efficiently, while understanding and exploring newer methods to digitalise business-related activities.

Here are important technology trends that are positively impacting and revolutionising businesses -

1. Cloud Technologies

Organisations today prefer cloud systems over on-premises systems for multiple reasons including reduction in operational costs, flexibility, time and resource management, software integration and many more. A secure cloud server providing employees access to their organisation’s workspaces, databases, analytics and computing power remotely is a must to achieve greater collaboration, flexibility and scalability across departments and functions. Cloud technologies have enabled employees to work remotely without any issues which was a huge challenge highlighted during the COVID-19 pandemic.

2. Resource Management

Large-scale global organisations face challenges when it comes to handling, managing, and allocating their resources efficiently. Resources including financial and human resources are not utilised optimally. The implementation of ERP – Enterprise Resource Planning software have allowed companies to efficiently handle these resources with a wide range of feasible and relevant solutions like HRMS solutions. These integrated applications can automate, manage and better business processes and operations which is a major hassle at the corporate level across geographies and verticals.

3. Robotic Process Automation (RPA)

RPA refers to the utilisation of technology solutions to automate processes or steps/parts in a process. It has played a key role in developing, implementing and integrating automated processes critical for business efficiency leading to reduced turn-around time and cost of operations while also eliminating manual intervention and human error. Standard processes which are repetitive like data collection, monitoring etc. take up a significant chunk of an organisation’s time – automating these processes will free up worthwhile resources allowing for better resource utilisation and increased efficiency and productivity.

4. Data Analytics and Business Intelligence

Since the onset of digitalisation, organisations have accumulated immense data consisting of clients, transactions, payments, processes etc. which is invaluable as it can improve decision-making and provide relevant insights using tools. Data analysts are utilising new-age tech tools to carry out profound analysis of the underlying data to get a better understanding of the patterns behind it and ensure that the data analysis is accurate, thus optimising profits and increasing efficiency.

The representation of information in the form of interactive dashboards using tools like Power BI, Tableau etc. in the form of easy-to-understand and user-friendly real-time reporting, provides large communicative value: visuals are easily shared among individuals to impart or explain a concept.

5. Artificial Intelligence (AI) and Machine Learning (ML)

Taking data analytics further, AI and ML can be used in organisations to handle high-dimensional, high-volume, high-variety data sets to identify patterns and other insights which are invaluable for business intelligence and decision-making. ML give companies extra insights into their business decisions and plans over time that lead to higher levels of customer satisfaction, increased efficiency, growth and/or profits. Such predictions in turn lead to the definition of strategic KPIs, more optimal budgetary expenditure and better evaluation of data.

6. Blockchain Technology

Blockchain is a system in which records of transactions are maintained across several computers that are linked in a peer-to-peer network – simply put: a digital, decentralised, distributed ledger of transactions. The applications for blockchain technology in business are endless – Supply Chain Management, Smart Contracts, Integrating Regulators, Financial Transaction Management and many more. The level of regulatory oversight in modern organisations alone is the driving force behind adopting blockchain on a large scale, as well as cost reduction and competitive advantage.

7. IoT – Internet of Things

IoT is the interconnection via the internet of computing devices embedded in everyday objects, enabling them to send and receive data from various sensors and regulators. This network greatly enhances the collection of data previously unobtainable along with a certain independence of devices since they can interact by themselves. The applications of IoT in business are vast – inventory tracking, location tagging, data collection, quality check and many more which are slowly being integrated into businesses to improve the connected experience aspect of technology.

Technology is rapidly growing and advancing to adopt better practices in the workplace. Organisations must leverage these new-age technology-backed tools to stay relevant and maintain a competitive edge in the market as these tools go a long way in handling a variety of challenges faced by businesses and customers alike.

Guest Column
Vimal Agarwal
Chief Financial Officer
Mahindra Lifespaces

How technology is building smarter organisations that are focused on People, Planet and Profit

In the past, and even now, we have some of the best minds creating a variety of organisations that grew and thrived on the back of individual brilliance, supported by a few extraordinarily committed team members. The key objective of these organisations was to generate Profits. In their quest to continuously improve profits, these organisations grew locally as well as globally. With this growth came complexity and to address this complexity more People got added to the workforce. This explosive rate of growth was largely subsidised by exploiting the planet which led to a growing chorus around safeguarding the Planet for future generations.

This evolution led to the emergence of three key planks to any organisation’s strategy viz. Profit, People and Planet (3Ps). To address these 3Ps, technology has made phenomenal inroads in almost every organisation. A few centuries ago, the Industrial Revolution led to a widespread expansion of organisations in multiple geographies. The profitability of these organisations multiplied but at the same time, it led to wider global development. This technological tirade has continued ever since and has only grown in its intensity, impact and influence over executive decision-making. It is now a very well-acknowledged truth that every organisation is a technology organisation as their very survival will be challenged if they do not embrace it. Data analytics, for example, is today the single biggest source to understand consumer behaviour and positively impact consumer scores.  If we go a little deeper, we will realise that it’s not only functions like production, sales and marketing which are getting impacted by technology, functions like tax, legal and finance are no more untouched by the tech onslaught. Organisations which are holding out against tech are doing this at their peril.

Also, it will not be very wise to assume that while technology is changing all around, People will remain untouched and unaffected. Very early on, with every technological breakthrough, it was assumed that people working in organisations will lose their jobs and be the ultimate sufferers. However, till now People (a.k.a. humans or an organisation’s workforce) have proved their resilience by reinventing themselves and ensuring that they continue to rule this tech-enabled world. With multiple developments around technology, automation, artificial intelligence (AI) and robotics, one must acknowledge that technology and people are inseparable, and both will need to learn to co-exist. More so when aspects like empathy, motivation and emotional connection cannot be altogether replaced with technology.

In today’s hyper-competitive world where the shelf-life of any new technology is a few months if not a few weeks, technology is much more affordable and accessible to organisations. This will mean that organisations will need to continuously innovate and emerge with ideas which can usher them into the next growth phase. And that brings us to the third “P” of the 3P puzzle viz Planet. Most organisations are committing to goals related to “Sustainability” to make the Planet a better place for future generations. To achieve these goals, organisations will need to work backwards to ensure that sustainability actions are embedded in various initiatives right at the design or initiation stage. Future technology and innovation will be the key to achieving such goals. Across industries, there are numerous start-ups which are experimenting with newer and better ways of working. Organisations, seeking to build an edge over others are actively exploring and engaging with this innovation eco-system in a very big way as they know that these future innovations will be key, as they work on delivering on their promise of Profit, People and Planet. 

Expert Reel

Innovation is changing the business world as we know it - or is it? Watch Professor Julian Birkinshaw as he challenges the thinking of how technology impacts companies and emphasises on building resilience in business.


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