Intra-corporate group restructurings will alter the country's economic architecture and ultimately benefit consumers as more Indian companies get involved in cross-border mergers and acquisitions (M & As) than ever before, chairman of the Competition Commission of India Ashok Chawla has said.
Most segments of the Indian industry have traditionally been quite fragmented, which has led to fragmented capacities. This will change as new business models evolve and companies consolidate to scale up operations and maximise long-term value of stakeholders, he said while addressing a conference organised by a leading industry body.
"The inter-play of market forces calls for a broad regime to avoid adverse practices and improve businesses for consumer satisfaction. We would like to encourage creation of entities which can deliver faster and better goods and services," said Chawla while addressing the conference titled 'Changing Dimensions of Corporate Restructuring.'
However, he said the current global economic conditions are not robust which have led to reduced M & A activities. How the Eurozone sovereign debt crisis unfolds and slow recovery in the United States and Japan rebounds will determine activities in India.
Minister of state for corporate affairs R.P.N. Singh said emerging markets are compelling places to be in for international companies. "M & A activity is likely to pick up worldwide in years to come due to higher growth and the desire of companies to invest the cash hoarded during recession."
Singh said there is a growing perception about the widening gulf between India's reality and its immense potential. There is need to move beyond comfort zone. "Industry leaders must gather confidence, and facilitate regulators and policymakers to ensure sustainable inclusive growth for the well-being of all stakeholders in the society."
AABC Business Bureau
