India Economic Update
Milind S. Kothari
Managing Partner
BDO India

Despite an overall global gloom, the Indian economy continues to fire on all cylinders. It is expected to grow at 6.5% during fiscal year 2023-24, whereas the global economy is expected to report a 3% growth. India’s journey is remarkable, to say the least - being regarded as the world’s fastest-growing large economy today and aiming to become the third largest by 2030.

The new fiscal year 2023-24 has begun well, with a likely expansion at 7.8% in the June quarter. Once again, the quarter witnessed resilient domestic demand, increased government capital expenditure, and a nascent revival in private investment. Meanwhile, the direct tax numbers suggest that the economic growth momentum has also continued in the second quarter of the fiscal year (July- September 2023). Additionally, the Goods and Services Tax (GST) collection for August 2023 stood at USD 19.10bn, maintaining a steady growth of 11% on the back of sustained economic growth. The general expectation is that the cumulative tax revenues will display a healthier trend at the end of September 2023, helping soften the rise in the fiscal deficit relative to the preceding year. Interestingly, the tax-to-GDP ratio is now more than 1.3 because of improved tax collection efficiency seen in the June quarter.

India’s one-year presidency term of the G20 nations concluded in August with the participation of global leaders coming together in the nation’s capital, New Delhi. The summit concluded with a unanimous declaration signed by all the nations that presided and covered subjects that would have a long-lasting economic impact globally. The 83-para declaration lays out a plan for addressing major global concerns while putting women's empowerment as a high priority on the agenda. The summit declaration included a need for invigorating multilateralism, reforming international financial institutions, and managing global debt vulnerabilities. These measures will allow additional lending headroom of USD 200bn.

At the G20 summit, visible to all heads of state and participants was India’s continued progress, retaining its position as a bright spot globally regarding its economic growth. The Indian economy has progressed to a virtuous cycle on the back of important reforms such as the introduction of a unified GST, the Insolvency & Bankruptcy Code (IBC), regulating the real estate industry with the introduction of RERA, etc. The domestic economy has witnessed substantial improvement over the last five years. The bank balance sheets have become robust and well-capitalised, and NPAs (non-performing assets) have reduced significantly. Importantly, India Inc. has also deleveraged extensively over this period and can now absorb a reasonable debt-to-fund future capacity expansion. Furthermore, private capex is on the rise, with PLI-led manufacturing at the forefront.

A topic of fascination for the member countries was India’s digital infrastructure. With nearly half a billion internet users in India, indigenous digital services, platforms, applications, content, and solutions are expected to transform the digital ecosystem. India could potentially see a fivefold increase in economic value from digital transformation by 2025, representing an attractive opportunity for global and local businesses, start-ups, and innovators to invest in emerging technologies (like AI, blockchain, or drones).

Digital India, as an umbrella programme, was launched in 2015. It has added more internet subscribers in rural areas in the last three years (2019-21) than in their urban counterparts (95.76 million compared to 92.81 million in rural and urban areas, respectively). The programme has been the backbone of dedicated digital drives across rural areas through ambitious government schemes, like the flagship BharatNet Project Scheme and the Telecom Development Plan, among others. The astounding result is the 200% increase in rural internet subscriptions between 2015 and 2021 against 158% in urban areas, reflecting the increased impetus the government provides to bring rural and urban digital connectivity to the same level. The desired outcome, as per the vision of India’s Prime Minister, is digital empowerment for every Indian as the country marches towards India’s ‘Techade.’

Taking centre stage at this time is the endeavour to become a developed nation by 2047 - the year India marks 100 years of freedom. Fervent policymaking is already underway to reorient policies and priorities to actualise this goal. The Finance Minister, Ms Nirmala Sitharaman, unveiled the Panch Pran (five resolutions) as envisioned by Prime Minister Narendra Modi. The five resolutions are to turn India into a developed country by removing every trace of bondage, taking pride in its heritage, maintaining unity and integrity, and fulfilling their duties to achieve the dreams of India’s freedom fighters. India’s per capita income is set to increase 7.5 times to USD 18,000 from USD 2,500 by fiscal year 2047, indicating that the country is on course to becoming a developed economy by the centenary of its independence.

With an extensive agenda, redefined by the landmark agreement reached with the members of the G20 delegation, India’s political leadership has its hands full with much to accomplish. Also, the ensuing general elections coming up in May 2024 will keep the turnstiles busy as Indians revel in the outstanding success of the G20 Summit!

M & A Tracker
Rajesh Thakkar
Partner and Leader

M&A Tax and Regulatory

Deal Advisory Services

Between 30 July 2023 and 29 September 2023, around 83 M&A deals were announced of which 36 M&A deals were closed. The aggregate value of deals announced is USD 4,358.4mn; dominated by 60 domestic deals (USD 3,580.9mn) and 23 cross-border deals (USD 777.5mn).

In terms of sectors (considering only closed deals), Healthcare saw deals worth USD 372.4mn, followed by Utilities with deals worth USD 280.41mn and Information Technology with deals worth USD 22.7mn.

Significant deals closed between 30 July 2023 and 29 September 2023

Target Company
Virescent Renewable Energy Trust
Acquiring Company
India Grid Trust
Deal Value (in mn USD)
  • India Grid Trust acquired Virescent Renewable Energy Trust (Virescent) for USD 280.41mn (INR 22.99bn) from KKR and Company Inc (KKR), through Terra Asia Holdings II Pte Ltd.
  • Post the transaction, KKR has made a complete exit from the company and Virescent operates as a subsidiary of India Grid Trust.
Target Company
AMRI Hospitals Limited
Acquiring Company
Manipal Health Enterprises Private Limited
Deal Value (in mn USD)
  • Manipal Health Enterprises Private Limited (Manipal Health) acquired an 84% stake in AMRI Hospitals Limited (AMRI Hospitals) for USD 276.34mn (INR 23bn).
  • Post the transaction, AMRI Hospitals would operate as a subsidiary of Manipal Health, and Emami would continue to hold a 15% stake in AMRI Hospitals with the Government of West Bengal holding a 1% stake. The acquisition would help expand Manipal Health's presence in eastern India.
Target Company
Asian Institute of Nephrology and Urology Private Limited
Acquiring Company
Asia Healthcare Holdings Advisory LLP
Deal Value (in mn USD)
  • Asia Healthcare Holdings Advisory LLP (Asia Healthcare) acquired a majority stake in the Asian Institute of Nephrology and Urology Private Limited (Asian Institute) for USD 72.09mn (INR 6bn).
  • The investment is a mix of primary and secondary infusion.
  • Post the transaction, Asian Institute operates as a subsidiary of Asia Healthcare. The acquisition strengthens Asia Healthcare’s vision of scaling the single speciality healthcare delivery ecosystem in the country.
Target Company
Pocket Aces Pictures Private Limited
Acquiring Company
Saregama India Limited
Deal Value (in mn USD)
  • Saregama India Limited (Saregama India) is acquiring a 92.61% stake in Pocket Aces Pictures Private Limited (Pocket Aces Pictures) for USD 22.7mn (INR 1.89bn).
  • As a part of the transaction, the company will acquire 6,60,650 equity shares representing a 51.82% stake for INR 1.74bn in the first tranche and subscribe an additional 25,974 equity shares by primary subscription.
  • Post the transaction, Pocket Aces Pictures would operate as a subsidiary of Saregama India.
  • The acquisition will add a whole new dimension of IP and a distribution network of over 95 million followers, which Saregama India will leverage to further popularise its music library among the audience segment between 18-35 years.

Significant deals announced between 30 July 2023 and 29 September 2023, but not closed

Target Company
Glenmark Life Sciences Limited
Acquiring Company
Nirma Limited
Deal Value (in mn USD)
  • Nirma Limited is acquiring a 92.17% stake in Glenmark Life Sciences Limited for USD 839.79mn (INR 69.95 bn) through a share purchase agreement followed by an open offer.
  • The buyer will acquire Equity Shares representing a 74.84% stake at a price of INR 615 each for INR 56.51bn from Glenmark Pharmaceutical Limited through a share purchase agreement.
  • Post the transaction, the buyer will hold 92.17% stake in the company and Glenmark Life Sciences Limited will operate as a subsidiary of Nirma Limited.
Target Company
PayU Corporate, Global Payment Organisation
Acquiring Company
Deal Value (in mn USD)
Information Technology
  • Rapyd is acquiring the Global Payment Organisation of PayU Corporate for USD 610mn (INR 50.19bn).
  • The transaction is subject to regulatory approvals and closing conditions.
Target Company
CaratLane Trading Private Limited
Acquiring Company
Titan Company Limited
Deal Value (in mn USD)
Consumer Discretionary
  • Titan Company Limited (Titan) acquired an additional 27.18% stake in CaratLane Trading Private Limited (CaratLane) for USD 555.92mn (INR 46.21bn) from the Founder of CaratLane.
  • The transaction is financed through a combination of cash balances, internal accruals and debt and is expected to be completed by 31 October 2023, subject to approval from the Competition Commission of India, customary regulatory approvals, and closing conditions.
  • Post the transaction, Titan would hold 98.28% stake in CaratLane.
Feature Story
Soumen Datta
Partner / Digital Transformation
BDO Digital

AI and Beyond - A new era for human-machine collaboration

Generative AI (Gen-AI) is unlocking new dimensions of storytelling, revolutionising the creative process, and enabling previously unimaginable narratives.

Generative AI – Rewards vs. Risks

Generative AI (Gen-AI) has been evolving at a rapid pace. In November 2022, OpenAI's ChatGPT became the first widely used text-generating product, gaining a record 100 million users in two months. The launch spurred rapid development of Gen-AI innovations, resulting in multiple new releases and iterations each month, like Microsoft's Kosmos-1 in February 2023, Salesforce Einstein in March 2023, Amazon's Bedrock, etc.

The possibilities of Gen-AI are thrilling to many. But like any new technology, it doesn’t come without potential risks. It presents significant risks related to bias, misinformation, privacy, security, and ethical concerns. Gen-AI models can inherit biases present in the training data, leading to biased or discriminatory content generation. It can be used to create fake news, forged documents, or misleading content, which can have serious consequences for public opinion and trust. Widespread adoption of Gen-AI for content creation could potentially lead to job displacement in industries that rely heavily on human-generated content.

Striking a balance between reaping the advantages of Gen-AI and addressing the risks through responsible development and regulation is vital to harnessing its potential effectively.

Data/ AI regulations and their implications on businesses

Data breaches, cyber incidents, and privacy concerns have become significant issues for businesses worldwide. Privacy concerns relate to responsible handling of personal and sensitive data which lead to issues including loss of trust, ethical considerations, and employee privacy.

The implications of regulations like the DPDP Bill in India, GDPR in the EU, and similar laws in the US and UK have reshaped how businesses collect, use, and protect data. Adhering to data protection regulations often requires significant investments in technology and legal compliance efforts. However, companies that prioritise data privacy and security can gain a competitive edge by building trust with consumers.

Impact of AI on business strategy

AI has emerged as a transformative force in reshaping business strategies across industries. It has had a profound impact on data-driven decisions, efficiency enhancement, and customer experience improvement.

In the realm of data-driven decisions, AI processes and analyses vast datasets at speeds humans can't match. This enables organisations to derive meaningful insights from their data, leading to more informed and accurate decision-making. Predictive analytics powered by AI algorithms forecast trends, allowing businesses to proactively respond to market shifts, optimise resource allocation, and reduce risks. AI reduces bias in decision-making by relying on data rather than human judgment, promoting fairness and objectivity.

Automation through AI-powered bots and Robotic Process Automation (RPA) streamlines repetitive tasks, reducing human error and operational costs. Supply chain optimisation, predictive maintenance, and logistics improvements save resources and minimise downtime. This translates into cost savings and improved resource utilisation.

Customer experience has been significantly enriched by AI. Personalisation tailors products and services to individual preferences. Chatbots and virtual assistants (like Siri, Alexa, Cortana, Bixby, etc.) powered by AI provide instant, round-the-clock customer support, enhancing responsiveness and satisfaction. Sentiment analysis tools monitor customer feedback, helping address concerns promptly, and make data-driven improvements.

Leveraging AI with ethical considerations

Ethical considerations surrounding the integration of AI in the workplace, manpower strategies, and hyper-personalisation of customer experiences are crucial to ensuring responsible and fair use of AI technologies:

  1. Job Displacement and Workforce Impact: Companies should prioritise the well-being of employees affected by automation and AI. Ethical considerations include reskilling and upskilling programs, job transition assistance, and support for displaced workers Ensuring that new opportunities created by AI are accessible to all, regardless of demographics or socioeconomic status, is an ethical imperative.
  2. Manpower Strategies: Organisations must communicate transparently about their strategies for AI adoption and its implications. Ensuring employees understand the role of AI in their work fosters trust and mitigates fear of job loss. Manpower strategies should prioritise diversity and inclusivity to mitigate biases.
  3. Hyper-Personalisation of Customer Experience: In AI-driven hyper-personalisation, respecting user privacy, avoiding manipulation, ensuring fairness, and providing opt-out options are ethical imperatives. Businesses should transparently communicate their personalisation strategies and allow users to understand and control how AI tailors their experiences.

In conclusion, ethical considerations are pivotal in integrating AI into business strategies. Ensuring fairness, inclusivity, privacy, and transparency not only safeguards the well-being of employees and customers but also maintains trust and sustainability in a rapidly evolving AI-powered world. Continuous learning and compliance with regulations are essential to unleash the full potential of AI in an evolving digital landscape. The statement by Bernard Marr – "AI is not the future, it is the present. It is not a technology; it is a mindset. Embrace it or get left behind" - underscores the urgency and significance of AI in today's business landscape.

Guest Column
Dr. Prashant Pansare
Founder & CEO
Inteliment Group & Rubiscape

Generative AI – Spurring a transformational journey for businesses and workplaces

In times when software writes itself and machines learn, AI is set to revolutionise every industry. Businesses that invest in research and development, talent acquisition, and responsible AI practices are likely to maximise the potential benefits of Generative AI in their operations.

Investing in AI-skilling programmes for leveraging human-AI collaboration

Gen-AI is effective in content generation, automation, and personalisation. It can be used to create personalised content or recommendations, enhancing user experiences in areas like e-commerce, content delivery, and advertising. It can improve and simplify language translation, making information more accessible across different languages. Gen-AI can be used to create content for individuals with disabilities, such as generating audio descriptions for visually impaired users.

Navigating an AI-ready workforce is an essential aspect when it comes to leveraging the full potential of AI for businesses. A key consideration for companies would be investing in training and upskilling programmes for existing employees. There is a growing demand for AI-ML skills, and organisations can start by conducting an AI Readiness study by understanding the existing skill sets, technologies, and processes in place. This can be followed by identifying gaps and areas for improvement and then setting programme goals on how AI can add value in areas such as improving efficiency, enhancing customer experiences, or driving innovation.

Companies can run future-skilling programmes to develop AI-related skills across the enterprise and encourage collaboration between different departments and teams. Parallelly, guidelines and policies for ethical AI usage can be developed. Implementation of a change management strategy can go a long way to help the workforce adapt to AI technologies and the changes they bring.

Preparing for a long-term AI vision

Organisations need to foster a culture that embraces change, innovation, and learning, and develop a long-term vision for AI integration. AI is not a one-time project but an ongoing journey that evolves with technology.

A crucial aspect of a company’s AI journey would be investing in the necessary infrastructure to support AI – be it HPC, Cloud, or AI-ML tools. They can approach this by starting with small-scale AI projects or pilots to test the waters and learn from initial experiences, and then continuously monitor and evaluate the overall impact of AI on the organisation. AI would also further the need for risk mitigation strategies including strengthening cybersecurity measures to protect sensitive data and AI systems from potential threats.

A significant feature of AI is its universality and its flexibility. It is highly scalable to suit the needs of organisations, regardless of their size, service, or industry. With the right assessment and planning and by defining the goals of the business, one can be very selective in choosing the most appropriate AI-ML-DS platform. It is important to consider AI as a dynamic tool that needs to evolve alongside business and its data needs.

Parallels between AI and the dot-com bubble of the 1990s

Generative Pre-Trained Transformers, commonly known as GPT, are currently the highest used AI Chatbots worldwide. ChatGPT, Perplexity AI, or simple Text-to-Image AI conversions are also massive developments in the Generative AI race. However, it is important to note that AI is still in its infancy.

Although AI’s market value continues to boom, experts identify that its meteoric rise is similar to that of the dot-com bubble of the late 1990s; however, it is a close cut. While AI and the dot-com bubble have a rapid expansion rate, the difference lies in the tangible value that is generated. The dot-com bubble was driven by speculation around internet companies, whereas AI technologies have already proven their practical use in industries such as healthcare, finance, and automation. 

Key trends and directions that are likely to shape the future of Generative AI in the time ahead are:

  • Improved Language Models
  • Multimodal AI
  • Ethical and Fair AI
  • Customisation and Personalisation
  • AI for Creativity and Art
  • AI for Scientific Discovery
  • Natural Language Understanding
  • Interpretable AI

The sooner organisations embrace the power of AI, the faster they will be able to reap the benefits of improved efficiency and value creation across business functions, among other early-mover advantages.

Expert Reel
Bernard Marr & Co.

With the launch of ChatGPT, generative AI has captured the attention of not just tech enthusiasts or experts, but audiences from all walks of life. Universally recognised, its amazing utility cuts across education, business, politics, art, and product design, among countless other fields. While 2023 has been the year AI became ubiquitously recognised for its potential, more exciting trends await us in the near future.

In this video, Bernard Marr - An internationally best-selling author, popular keynote speaker,  and strategic business & technology advisor to governments and companies, walks us through the key generative AI trends we would most likely see in 2024, disrupting more fields and creating better use cases.


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