HSBC sees loan availability to drive growth for India M&A deals

Availability of credit as central banks hike interest rates along with the ability of Indian corporates to tap capital markets to raise funds will be key to driving growth in the local deal market, Amitabh Malhotra, head of global banking for HSBC India, said.

“Indian companies are very robust in terms of their balance sheets, so I feel that availability of credit and ability to tap into market are going to be key criteria from a risk perspective to aid this growth,” Malhotra told Rishaad Salamat and Haslinda Amin on Bloomberg TV, Monday.

Indian dealmaking this year was “a bright spot” as globally deals slowed, Malhotra said.

The domestic bond market and lenders have been tapped to finance companies’ capex plans, Malhotra said, adding that he expected that trend to continue. More than 30 initial public offerings raised about $7 billion in capital in India this year, and he thinks “there is going to be an increase in both numbers and value.”

HSBC was a financier in the $1.2 billion acquisition loan for Biocon Biologics Ltd., which acquired assets worth $3.3 billion from its U.S. partner Viatris Inc., this year.

“Acquisition financing, that backstops or supports dealmaking is also going to open up as we believe both debt capital markets and equity capital markets will open up for new issuances,” Malhotra said.