India business insights

India business insights - July 2017

Welcome to the summer edition of India business insights, in association with the London Stock Exchange.

After months of anticipation and many challenges, India’s Goods and Services Tax (GST) began at midnight on 30 June 2017. GST is widely expected to bring double-digit economic growth closer to reality. In this issue we highlight the challenges and benefits ahead and what this means for overseas investment.

We also look at the state of the Indian economy and provide an analysis of the Indian companies listed on the London Stock Exchange, as well as an overview of the Indian M&A activity highlighting the main transactions between India and Europe.

India’s new Goods and Services Tax – what it means for overseas investors

The new tax regime should encourage investment and make it easier to do business in India, but businesses will face a number of challenges in meeting the new compliance requirements.

Growth in Indian economy slows for fourth successive quarter

The Indian economy grew 6.1% in Q1 2017, the lowest growth rate since 2014. This slow growth rate is due to a slowdown in consumer spending and lower investment following last year’s demonetisation. However, many expect a return to double-digit growth as government reforms begin to bear fruit.

Grant Thornton India Watch indices take a hit as economy stalls

The Grant Thornton India Watch Index (performance of Indian companies in the London Stock Exchange) fell for the second consecutive quarter in Q2 2017 and our Small Cap Index also showed a downward trend for the year to date, with poorly performing stocks across a number of sectors reflecting India’s wider economic slowdown.

Big-ticket deals hold up Indian M&A and private equity values while volumes lag

HI 2017 saw Indian M&A deal value up a whopping 127%, despite lower volumes, largely due to the US$27 billion Vodadone–Idea merger. Private equity investments witnessed a similar trend, with big-ticket transactions supporting a 27% year-on-year increase in deal values.

For further information, please contact Anuj Chande, Head of the South Asia Group.