ACMA organised a national conference on leveraging mergers and acquisitions to explore inorganic growth in the industry. The conference was inaugurated by the Chief Guest Mr. Sunil Kant Munjal, Chairman, HeroMoto Corp and Director Hero MotoCorp and was presided over by ACMA past presidents including Mr. Deep Kapuria, Chairman, Hi-Tech Group, Mr. Ashok Taneja, Managing Director & CEO, Shriram Pistons & Rings Ltd. and Mr. Jayant Davar, Co-Chairman & MD Sandhar Technologies Ltd.
The conference showcased case studies of Sona Koyo Steering Systems, Jumps Auto Industries, Amtek Auto, and Sandhar Technologies. These auto component manufacturers have taken recourse to merger and acquisition for setting global footprint and have emerged not only successful but have also set benchmarks for the industry.
The event also witnessed release of the ACMA, Grant Thornton special report ‘Auto & Auto Components Sector Dealtracker – Providing M&A and Private Equity deal insight’. The report summarises the current economic and political landscape for the automotive sector and shares an insight on the overall inorganic growth scenario based on trends in the mergers and acquisitions space and the private equity placement space over the last few years with a specific focus on the year 2014.
As per the report, India Inc. witnessed 22 deals (M&A and PE) in FY14 worth USD 398 million. Of these, 17 were in the auto component segment indicating that the market is favourable towards consolidation and acquisition in the component and ancillary space. Several major OEMs have committed to develop its own sourcing and manufacturing hubs in India as a result of which the valuations in the sector are expected to become more attractive. Further, on the Private Equity (PE) front, the pace of investment by the PE majors in mid-market companies is likely to go up considering its easy access to capital, after the slowdown.