Search Results

Introduction The auto-components sector is one of the most important manufacturing industries in India. The sector covers supply of parts to domestic OEMs, aftermarket and for exports across a broad range of products: OEM Supply:  This segment involves the direct supply of components to vehicle manufacturers for assembly into new vehicles. It typically accounts for the largest share of the sector's revenue. Engine and Transmission Parts:  These are essential components for vehicle propulsion and performance, often constituting a significant portion of the market. Electrical and Electronics Components: This segment is rapidly growing in importance due to the increasing integration of technology, including ADAS modules, infotainment systems, and advanced braking components. Body/Chassis/BiW (Body in White):  These include the structural components of the vehicle. Suspension and Braking Systems:  Crucial for vehicle safety and performance. Interior and Exterior Components: Covering dashboards, seats, body panels, lighting, etc. Cooling Systems, Rubber Components, Consumables & Misc . Aftermarket: This segment caters to the demand for replacement parts for vehicles already in operation. It is driven by factors like the aging vehicle population and increased vehicle usage. Exports:  This segment involves the supply of auto components to international markets. With an annual growth rate of 8.63% over FY16 to FY24, the Indian auto-components sector is expected to grow at 14% CAGR in coming years, growing from USD 74 billion in 2024 to USD 111 billion in 2028.  In recent years, the sector has witnessed robust growth due to rising demand in 2W and passenger vehicles segments, especially the utility vehicles. Further, the share of high-margin, technology-driven components like ADAS modules, infotainment systems, and advanced braking components has significantly increased, contributing to stable operating margins. This reflects a structural shift in the industry. Growth Factors of Indian Auto-components sector Increasing Global Motor Vehicle Production Aging Vehicles and Aftermarket Sales Technological Innovation in auto parts manufacturing, including improved materials, precision engineering, and smart technologies (e.g., ADAS, infotainment). The accelerating shift towards EVs drives demand for specific EV-related components like batteries, electric motors, power electronics, and battery management systems. The rise of e-commerce platforms for auto parts, offering vast selections and competitive pricing, makes purchasing more convenient and broadens the consumer base. Growing consumer interest in vehicle customization and upgrades for older cars fuels demand for specialized parts and accessories. The advancement of self-driving technology increases demand for specific parts and systems required for autonomous driving capabilities. Challenges The automotive industry, and consequently the auto components sector, has been grappling with issues of overproduction and excess inventory, impacting profitability and operational efficiency. This is a recurring challenge that often stems from a mismatch between production targets and actual market demand. Global Overproduction and EV Transition:  The entire auto industry is struggling with overproduction, reduced demand, and the transformational shift towards hybrid and electric vehicles (EVs). Automakers are producing more cars than they can sell, leading to financial losses, job cuts, and a challenging transition to EVs. Factory utilization rates, a key indicator of profitability, have significantly dropped for most automakers since 2019. Regional Impact and Specific Cases:  Globally, the average factory utilization rate hovers around the high 50s to low 60s. North American factories are slightly better off at 70%, but they still face challenges. This overproduction is particularly evident in the EV segment, where significant investments have been made, but sales have not met ambitious targets, leaving EV plants operating at much lower capacities compared to internal combustion engine (ICE) plants. Inventory Issues:  In specific cases, a notable gap between wholesale shipments and retail sales can indicate excess inventory at the dealer level, suggesting overproduction or slower demand conversion. The presence of overproduction and excess inventory underscores the cyclical nature of the automotive industry and the need for agile supply chain management and demand forecasting within the auto components sector. Typically, the cycles (upcycle or downcycle) last for three years. Key M&A Drivers for Auto Component Makers Auto-component manufacturers are increasingly adopting the following strategies to ensure robust growth, optimal capacity utilization and insulating themselves from structural changes in the automobiles industry: Technology and Capability Acquisition (Future-proofing) Increasing shift towards EVs, autonomous vehicles and connected car technologies is forcing companies to aggressively expand their capabilities and expertise into those areas. Firms that possess specialized expertise, patents, and manufacturing capabilities in these areas (e.g., EV battery technology, power electronics, sensors for ADAS, software for infotainment and autonomous systems) have witnessed strategic tie-ups, investments and acquisitions by larger players. Thus, r ather than investing heavily in internal R&D over many years, which can be slow and expensive, acquiring a company with established technology is allowing faster market entry, stronger competitive edge, and filling critical technology gaps. This is especially true for traditional internal combustion engine (ICE) component suppliers looking to transform their portfolios. Market Expansion and Geographic Diversification:   The Indian auto-component makers export 25% plus of their annual production. India is also witnessing localization of advanced components such as automatic transmissions and electric motors – these are being driven by the Government’s Make in India initiative and PLI scheme as well as the China-plus-one trend. The uncertainties in global economic environment are growing due to increasing trade barriers. Consequently, Indian as well foreign corporates are expanding geographically to de-risk their operations through strategic acquisitions. Acquiring local players provides immediate access to established customer relationships, distribution networks, manufacturing facilities, and a localized understanding of market demands and regulatory landscapes. Economies of Scale and Cost Synergies (Consolidation):   There are some product segments facing declining volumes such as conventional powertrain components. In these segments. ‘last business standing’ strategies are at play. Thus, companies are acquiring or merging with competitors or even suppliers. These moves are geared towards improving pricing power with OEMs and achieving a more robust financial position through synergies in purchasing, production, and overheads. Portfolio Diversification and Product Line Expansion:   Auto-comp makers are expanding their product offerings beyond their core segments.  This is to mitigate risks associated with shifts in OEM demand, technological obsolescence and reduce dependency on single product type / customer. Some are also diversifying into non-auto products and improve capacity utilization. Companies are moving into adjacent product categories, such as aftermarket components, or diversifying into new materials or manufacturing processes. In the year 2024, many companies largely held off on M&A or made smaller-sized deals, due to volumes dropping approx. 60% in first three quarters. However, capacity expansions and diversification into adjacent product lines continued. There is a growing interest towards joint ventures or alliance arrangements. These allow flexibility to be competitive in times of high uncertainty while requiring lower investment than traditional M&A.   Impact of EV on Auto Components Sector The EV transition is impacting the auto components sector by way of: Displacing ICE-Specific Components:  Components unique to internal combustion engine (ICE) vehicles, such as engine blocks, fuel injection systems, exhaust manifolds, and traditional transmissions are facing declining demand. This poses a significant threat to companies heavily reliant on these parts. Creating Demand for New EV-Specific Components: EVs require a new set of high-value components, including: Lithium-ion Batteries and Battery Management Systems (BMS): These are core to an EV's performance and cost. Traction Motors and Controllers: The electric powertrain's driving force. Power Electronics: Inverters, converters, and on-board chargers to manage electric flow. Advanced Driver-Assistance Systems (ADAS) and Smart Cockpit Solutions: EVs often integrate more sophisticated electronics, sensors, and software. Shifting Value Composition:  The percentage of a vehicle's cost attributed to mechanical parts has decreased, while that of electrical, electronic, and software components has significantly increased. Impact of Electric Vehicles on M&A in Auto-Components Sector The transition towards hybrid and fully electric vehicles is fundamentally reshaping M&A strategies in the auto components sector: Swing from ‘scale’ to ‘scope’ deals Historically, M&A often targeted gaining market share and achieving economies of scale in existing product lines. Now, the emphasis is heavily on "scope" deals: acquiring companies with new capabilities, technologies, and intellectual property crucial for the EV and digital automotive future. This includes targets specializing in EV powertrains, battery technology, power electronics, sensors for ADAS, and automotive software. Prominence of joint ventures and partnerships Given the high capital requirements, technological uncertainties, and rapidly evolving landscape of the EV market, full acquisitions are perceived to be risky. JVs and strategic alliances are becoming the preferred alternatives. They allow companies to: Share Investment and Risk: Especially for capital-intensive areas like battery production. Accelerate Innovation: By combining complementary expertise. Maintain Flexibility: Allowing for scaling back or discontinuing projects if technology paths change. Supply Chain Integration (Vertical Integration):   In the EV components, companies are endeavoring to gain higher control over their supply chain. This is due volatility in raw material prices and the criticality of certain components (like semiconductors and battery materials). Companies are making upstream integrations into raw material sourcing or expanding downstream such as charging infrastructures. This helps achieve improved quality control, reduced lead times, and better cost management. Portfolio Transformation through Divestitures and Acquisitions: Companies are actively divesting non-core or legacy ICE-dependent assets to free up capital and focus resources on future growth areas. The cash generated from these divestitures is then often reinvested in acquiring “future-ready” businesses. Cross-Sector Deals: The convergence of automotive with technology and software sectors has led to M&A targets extending beyond traditional auto component players to include software firms, AI specialists, and even energy solution providers. The transition to electric and hybrid vehicles has made M&A a critical tool for survival and growth in the auto-components sector. The boardroom concentration has shifted from getting bigger to now becoming smarter, more agile and strategically well-positioned for the future of mobility. We at GM Corporate Solutions are actively supporting Indian auto-component manufacturers in their inorganic growth strategy. For details on current opportunities, feel free to contact our team .

Climate and sustainability have been growing in focus for several VC, PE funds as well as corporates across the world. Given the change in global economies and geopolitics, M&A might be a better strategy for climate-tech startups as well as companies.  Introduction With the looming disruptions due to climate change, there is a growing urgency to mitigating greenhouse gases emissions. International institutions and governments are implementing favorable policies and doling out subsidies and cheaper debts. Regulations in various jurisdictions now mandate carbon footprint reporting and tracking progress towards net-zero targets. There is a huge opportunity for businesses working in the field of climate change and sustainability. It is estimated that the global transition to net-zero could require investments of up to USD 100 trillion. This covers themes such as climate-tech, clean-tech, green-tech, etc. Climate-tech is focused on mitigating greenhouse gas emissions and addressing climate change crisis. Clean-tech emphasizes developing alternatives to existing products, services and systems to reduce the negative impacts on environment. Investment and M&A deal trends in Climate-Tech From 2021 onwards, climate-tech sector has received approx. USD 240 billion of equity investment, with investment into Indian companies being USD 10 billion. Further, since 2021, over USD 110 billion fresh capital has been raised by funds with some climate focus. Surveys report that over 40% of Limited Partners acknowledge significant to moderate impact of climate risks on their investment decisions. Annually, climate-tech investment as a proportion of total VC and PE investments has steadily increased to more than 10%. EV technology, renewables and grids and utility have led the tallies in terms of deal value and deal counts. Further, the climate-tech sector has witnessed M&A deals worth USD 170 billion across 750 deals from the year 2021 till 2024. By type, buy-out deals posted a slightly higher deal value at 55% of overall climate-tech M&A activity during the period, with balance accounted by strategic M&As. Though, in terms of deal count, strategic M&A are more than double than buy-out deals. Segment-wise, renewable energy has clocked the largest deals, followed by sustainable food, grid infrastructure, clean fuels and mobility. The exponential rise of generative-AI solutions has propelled innovations in climate resilience and mitigation. Generative-AI capabilities being utilized for this purpose span computer vision, big data analysis, deep learning, optimization and predicting modelling. These are powering smart HVAC solutions, improving utilization of renewable assets, balancing power loads in EV charging, providing real-time weather analytics, carbon offset projects monitoring, verifying forest fires, etc. Sustainability as a cornerstone of strategy Companies are recognizing sustainability as a strategy to not only de-risk their ongoing operations but to improve performance and spur growth. Towards this, many companies are investing in and acquiring climate-focused businesses with the following goals: Achieving sustainability goals and improving the ESG profile. Complying with regulatory requirements such as environmental and waste regulations, emission reduction targets, accurate reporting of carbon footprint, and meeting net zero targets Future-proofing their products portfolio to avoid paying carbon taxes and benefiting from grants and tradeable credits. Overall risk mitigation and performance improvement as a long-term play. Companies desire to raise their brand value by positioning themselves as sustainability leaders. This also helps companies draw investor interest from climate-focused funds and also generate superior shareholder returns. To improve transparency, companies are also resorting to specialized accounting software and d-MRV systems for accurate GHG emissions tracking. Utilizing such software helps companies in ensuring compliance with assurance requirements and enhance investor & customer confidence. The Funding Winter In the global investment climate, there has been a marked shift due to ending of zero-interest rates in the US since 2022. Developments such as energy crisis in Europe due to Ukraine-Russia war, USA’s withdrawal from Paris Climate Agreement, US-China tariff wars, and protectionist measures across various countries are further affecting the investment landscape. Funds have recalibrated and are placing more emphasis on financial returns. Certain technologies in the climate-tech space require longer time horizons to mature from pilot and demonstration facilities to reach full-scale commercialization. While there is approx. USD 86 billion of dry powder to be deployed, investors have become more particular in deploying capital. First-of-a-kind projects are facing challenges in getting financed, given the cautious investment climate. There still remain large funding gap for companies wanting to scale up from pilot stage to full-scale commercialization. In India, for example, there is shortage of funding between fund-raise of USD 1 million to USD 10 million (Seed to Series A stage). Venture debt investors also come to the table once a startup starts generating recurring revenue with clear visibility on profits. Corporate partnerships and M&A in climate-tech Investments and partnerships with corporates provide faster route towards commercialization, with deeper pockets, industry expertise, and patient capital to realize the product potential. For corporates also, strategic M&As in the climate space provide a quick headway and competitive edge. Some large corporations have also launched their corporate VC arms to invest into climate-tech opportunities that synergize with their existing businesses. The synergies that companies often aim for are: Globally, 100+ strategic M&A deals are being announced every year from 2021 onwards. Strategic M&As in the climate-tech sector are aimed towards integrating advanced capabilities, improving organization efficiency and providing innovative solutions to customers. The observed deals trend has been that, after energy and mobility, corporate investors have prioritized investing into their own sectors. To illustrate, consumer staples companies have invested mainly into food, agriculture and land-use.  Corporates are leveraging climate-tech acquisitions to increase potential revenue, achieve cost synergies and also transform their core businesses. In sectors, where circularity and decarbonization have larger role to play, such as materials, chemicals, energy-intensive industries, etc. companies are motivated to implement sustainability measures since it directly impacts their growth outlook and valuation. Certain companies are also divesting high-emission units and integrating technologies investing for optimizing their energy bills. To build a sustainable raw materials supply, companies are doing backward integrations and securing critical assets. For meeting waste management regulations and reducing downstream emissions, companies are also investing into waste collection, recycling facilities, etc. Higher valuations and ESG Due-Diligence With improved technologies, the impact of climate change on businesses can be measured reliably, making it easier to link this with financial performance as well. Sustainability is helping in enhancing operational efficiency, better employee engagement and retention and performance improvement. Due to cheaper avenues of financing, the cost of capital for these initiatives is also lower, thus generating higher ROI. All these factors are leading to buyers willing to pay higher valuations for companies that have taken active steps to be sustainable. Adjacent to this, many investor companies have incorporated ESG considerations in their due-diligence reviews for targets / investees regardless of their sectors. This helps the investors understand the risks associated with high emissions and improper resource use, viz. unforeseen future liabilities & payouts, reputational damage, supply chain instability, tax liabilities and penalties, stranded assets, etc. Due to specialized nature of certain climate-tech ventures, buyer corporates benefit from outsourcing ESG-specific due diligences to experts. Further, appropriate integration strategies need to be adopted for employees retention, adding the investee’s products and tech with organization’s existing set-up and synchronizing the management practices. Conclusion The funding from VC funds has been impacted due to various factors, especially for the climate-tech sector. With environment and sustainability becoming a strategic priority for several corporations, M&As and buyouts have been paving the way for climate ventures’ growth. Partnerships with corporates provide accelerated commercialization while also benefiting the corporates synergize for topline and cost savings. For ventures where gestation periods are longer, the patient capital and long-term horizon of corporates is better suited. We at GM Corporate Solutions expect to see more M&As in the climate-tech space. If you’re looking to explore inorganic growth in this space, do contact us.

The Paris Agreement in 2015 set the global target to keep the increase in global temperatures to 2°C above pre-industrial levels by the year 2100, and pursue efforts to limit it to 1.5°C. Following that, several actions have been taken with various countries setting and revising their Nationally Determined Contributions (NDCs).   The first Global Stocktake carried out in 2023 outlined that despite significant progress, the GHG emissions trajectories are not in line with the Paris Agreement and more efforts need to be made for mitigation and adaptation. The mitigation efforts to be focused on include tripling renewable energy capacity and doubling the average annual rate of energy efficiency improvements in this decade, phasing down unabated coal power, accelerating zero- and low-emission technologies such CCUS, deploying zero- and low-emission road vehicles, etc. The adaptation efforts aim at strengthening resilience and reducing vulnerability by focusing on addressing water-scarcity, health impact, infrastructure, poverty eradication, etc. The finance needs of developing countries are estimated at approx. USD 5.8 trillion for pre-2030 period to implement their NDCs. Hence, it has become important to mobilize private sector funds as well.   India has set a goal of becoming net zero by 2070, with ambitious targets for 2030 for renewable energy capacity and reductions in carbon emissions and carbon intensity. The Indian Carbon Credit Trading Scheme (CCTS) has been notified as market-based mechanism to set-up the Indian Carbon Market (ICM). The ICM will subsume the existing PAT-ESCerts and REC schemes for obligated entities. It will also provide offset mechanism for registering voluntary projects. The institutional framework has already been established and ICM is expected to become operational by 2026. The BEE has also notified detailed compliance procedure under CCTS and approved sectors in the offset mechanism. Further, India is also developing Climate Finance Taxonomy for categorizing sectors, classifying financial instruments and setting standards for green finance. This will help to prevent green washing and aligning economic activities with climate goals.   The climate change issue has also become important for businesses. The reporting mandates by regulators, financial institutions and investors have expanded to cover various sectors. Financiers are also offering debt at concessional rates for green projects. Capital is also being deployed via private equity, venture capital and impact funds, fostering innovation and increasing adoption of climate change solutions.   Majority of the investments still focus on software-based solutions, though many climate startups are providing hardware, hard-tech and infrastructure products. The gap exists because of larger scale of investment required in hardware solutions. Writing bigger checks on such ventures is considered risky by several VCs, compounded by limitations on ticket-sizes and fund cycles. Some corporates / corporate VC arms and asset financiers are bridging the gap, but that’s not sufficient to address the growing funding needs of climate hardware ventures.   The emergence of ChatGPT and generative AI startups has led to investors becoming familiar with pumping in tens of millions of dollars at initial funding rounds. While similar conviction is required to grow hardware-focused climate startups, it is also important to recognize that they would typically generate 2x-3x financial returns as they scale up.   It is projected that India needs USD 100+ billion a year until 2030 to meet its climate goals. This quantum would cover required investments across energy transition, climate adaptation, electric mobility, sustainable agriculture, infrastructure decarbonization and waste & circularity. Some of the emerging areas where investments need to be made are electricity grids, bioenergy, large-scale battery storage, commercial EVs, e-waste and plastic-waste recycling, cooling systems, green infrastructure, climate data analytics, etc. Besides private investments, the development of a strong carbon market and integration of offset projects would facilitate optimal funds flow towards mitigation and adaptation activities.

Considering the sheer size, economic fundamentals and vibrancy India holds, it does make sense to enter this market sooner than later. But what will be your India entry strategy? India comes second on the world population statistics with 1.3 billion people and is the seventh largest economy of the world in terms of GDP . However, it is also complex to enter this market without any prior experience and understanding of the regulatory and tax environment. Therefore, it becomes extremely important to keep in mind a few factors while entering the Indian market as a company from abroad, must contact with tax consultants in India . 1. A partner in need is a partner indeed Taking from the popular idiom ‘a friend in need is a friend indeed’, finding a partner who understands the Indian market, culture and economic landscape of the country can work out to be the best decision when looking to invest in the market as a new company. Experience and insight from the local company or the partner can help the new entrant in understanding the regulations, competition and pulse of the market. It can go a long way in helping the company not only comprehend the basics of the market scene in the country but also help network and build connections for future development. 2. Localisation holds the key to your India entry strategy While globalisation has dominated the world over for much over two decades, a very important strategy that still holds value when investing in a foreign market is to cater to the local population with their choice of products and services. Even a big chain like McDonalds had to offer vegetarian fast food options in India when they entered the Indian market. Their popular options including beef burgers were not introduced in India considering the religious sentiments and sensibilities of the Indian population. Localise is the mantra and localisation is the way forward to approach the Indian market keeping in mind that the Indian society is multi-lingual and pluralistic in outlook. Even tastes, preferences and cultures differ from one region to another. One of the latest buzzwords is hyper-localisation which means catering to customers across regions with ‘well-targeted personalisation’. This caters to region-wise tastes and preferences. 3. Pricing dynamics A fact that is given is that the Indian economy is predominantly low-middle income which means that your India entry strategy should be well-aligned when it comes to strategizing the prices. If the business is targeted towards low and middle-class economy, then the entrant has to bear in mind inflation figures and budget constraints of the low and middle class. As per the World Bank records, the per capita income of the people in terms of purchasing power parity (PPP) stands at US$6,490 in 2016 and a major part of the population is still below the poverty line. Considering that basic amenities like healthcare and education are not free, people spend judiciously on other requirements. Therefore, prices of products and services are sensitive to the dynamics of the market. 4. Keep long-term growth in mind Entering the Indian shores to make quick money is a strategy that may not yield much result as the Indian market has a lot of opportunities but also offers a lot of challenges. In order to develop the right India entry strategy and comprehend the environment requirements, it is mandatory that the new entrant gives time even at the possibility of compromising on short-term gains. Growth and goodwill can only be earned in the long-term and with it, finances will flow. 5. Understand the law of the land It is very important to pay due attention to the law of the land and seek legal advice before signing any papers. The Indian judicial system under the constitution of the country has a single integrated approach to state and union laws. There should also be provision for alternative settlement of disputes as the Indian judiciary has a backlog of cases and it may take money, time and effort to resolve disputes. Contact us for more information on this subject or to know how we can assist you in your plans to enter the Indian market for setting up a company in India.

As the English idiom 'to each his own’, global businesses can’t impose the global practices in the local Indian market. Such practices may not work in the Indian context. While many companies have entered the Indian market in last two decades, many of them have failed to create an impact or rather failed to create a mass appeal, mainly due to less focus on the right India entry strategy. They have only reached a certain section of the population but have failed to capitalize on the country’s talent or maximized the economies of scale. For instance, in the past seven years, a multinational company’s revenue has only grown 7% annually, which is almost twice that of the parent company in the same period of time. However, the growth rate of the company is just half of that of the sector in India. Know more about our India entry services: https://gmcorpsolutions.com/services/entry-strategy-implementation-assistance . The way forward for many global multinationals is to formulate the right India entry strategy, and do business the Indian way rather than copying practices from the world over. Many global companies have learnt the lesson in China, which is the now being treated as the second home market. Though, the trend has been slow in India, there are few examples were such success is in full display: When a leading beverage company entered the Indian market, its approach was sole ownership of distribution which not only raised costs but also dampened the penetration in Indian market. The managers zeroed on other two big challenges of Indian market which made organised distribution extremely difficult. There was the requirements for multiple channel handoffs and labour laws. The company contracted distribution to entrepreneurs instead of sole ownership of distribution which helped the company in raising market penetration and cutting costs. One of the largest manufacturers in India is a global automobile company growing at a rate of over 40% per year since the last decade. It has a local manufacturing plant, research and development facility to understand the Indian milieu and mindset and a popular Indian figure as its brand ambassador. Invest, empower and commitment are keywords that multinationals should keep in mind while crafting their India entry strategy. They should invest in local talent, empower local population and be committed towards Indian market to be able to make a name. Customization or personalisation in order to increase appeal can help multinationals enter the Indian market. India’s economy is expected to grow by 6% and upwards annually in the next few years, and is among the highest emerging economies of the world. In several product categories including mobile handsets, India could account for more than 20% of global revenue in the next decade. Therefore, it will not be wrong to consider India as a yardstick or a benchmark that could assess the value of multinationals with their ability to stick it out in Indian economic conditions and succeed in the country. Contact us for more information on India entry strategy or to know how we can assist you in your plans to enter the Indian market.

For a multinational to enter the India market, it is first and foremost important to think through the ownership structure. As a surprise to many, it is reported that multinationals who know how to enter India market that enters the Indian market as stand-alone entities fare better than the ones who enter into joint ventures with Indian partners. Most of such businesses have either exited or purchased the stakes of the Indian partners or have established majority shareholdings. For instance, one global consumer goods company bought the Indian partner over differences in brand positioning and product marketing. The multinational is now a name to reckon with in all the segments that it competes in. Advantages of knowing how to enter India market Several multinationals think that having a local partner in the Indian market is an advantage as it helps the global partnership to understand how to enter India market including market regulations. Though it is true to an extent, such joint ventures are mostly for short-term performance over long-term goals, long-term association, and the aligned interests of the foreign and local partners. Without clear-cut ownership and management control, global companies may soon find itself exiting the Indian market. Though joint ventures are beneficial in some cases, if a multinational views India as a priority market and regulations allow the company to have its complete stake, then joint ventures are not essential. When opting for joint ventures, it is mandatory to have a clear-cut ownership path as well as management control in order to avoid confusion at a later stage. Know more about how to enter India: http://www.gmcorpsolutions.com/service/entry-strategy-implementation-assistance What does it take to enter the India market? A strategic alliance is also a way of associating with the Indian local players which are different from joint ventures. For instance, an Indian company and an international technology manufacturer set up a manufacturing plant with fewer costs and double the production volumes every 18 months. With such high-profit margins, it became the largest of the multinational’s plant in India and soon, from “nice to have” category, India moved to become a significant part of its international operations. A global pharmaceutical company, though a stand-alone entity, entered into strategic alliances with a local manufacturer in licensing and supplies for off-patent and generic medicines segments. This step of alliances helped the multinational to break into the fast-growing market of low-cost, branded and easily accessible generic and off-patent medicines in India. To develop a sound understand of how to enter India market requires a lot of commitment and a willingness to continue over long periods of time in order to make a breakthrough. The need for global players is to adapt to low-cost delivery systems that are innovative with a high margin of profit alongside a well-established ownership model. The management of local stakeholders including activists and regulators need to be taken into account by the senior executives of such global firms. The efforts over a period of time may be in vain if such local groups are not taken into confidence and are overlooked. Contact us for more information on this subject or to know how we can assist you in your plans to enter the Indian market being your Financial Advisor for setting up company in India .

With India’s focus on digitising the energy sector and vast improvements in the energy availability and its heart on ensuring and pushing for sector reforms, the opportunities for investors from developed countries such as the US are increasing wherein they are ready to invest on diverse energy plans rather than sticking to the conventions, in this case, the conventional energy plans in the energy value chains. In other words, the confidence of investors has been boosted by these measures taken by the Government in the energy sector. Apart from conventional energy resources like thermal power, US investors are looking to partner with Indian firms in the abundant wind and solar energy sectors. Since India’s infrastructure development is on the rise, in the power generation space, investors can associate themselves with EPC or engineering, procurement and construction. Today, investors can participate as IPTCs or Independent Private Transmission Companies owing to the privatisation of transmission companies. There are several other opportunities offered by the energy sector like manufacturing of components: Electrical equipment : As there are more and more voices supporting renewable energy, there is a need for technology upgrade in the T&D or transmission and distribution space. Industry players are focusing on upgrading to the next higher voltage system of 765 kV. They are also looking to supply transformers and other related equipment in this segment. Due to the reduced emissions and efficiency of clean coal technology for thermal power plants, the Government of India is focusing on highlighting their use. The upgrade of infrastructure at the existing plants is a major investor-friendly move. Solar Photovoltaics or Solar PV : Solar rooftops have been in the news in India since the last few years. But what many don’t know is India’s ambitious plan to generate 40 GW of power from the use of solar rooftops for which 26 states have favorable policies towards net metering. Alongside, the incentives for domestic manufacturing under Make in India present a viable opportunity for solar PV in India. Modules : Many fiscal incentives have been launched to boost the domestic manufacturing of PV modules within India which have so far been predominantly imported from China. Inverter : The local industry’s move from 600 V to 1,000 V has contributed towards a low-cost ‘1,500 V structure’ which has started to attract a lot of global players to invest in India and set up factories within the country to meet the local power demand.

The air traffic in terms of the passenger, as well as freight transported, has been multiplying significantly every passing fiscal year. The air traffic is being projected to grow at a compound annual growth rate (CAGR) of 10%, every year through 2015-2020. By 2030, if the CAGR holds, the numbers for passenger traffic is predicted to reach 850 million. Government has taken many key initiatives to drive the growth of this sector such as- Constructing highways-cum-airstrips, awarding routes to airlines as well as helicopter operators with the objective of enhancing flight services to hilly and remote areas at discounted rates, allocating funds vastly for the airport building and modernization projects etc. With the increase in GDP, the growth in air traffic from Tier-2 and Tier-3 cities is expected to exhibit a compounded growth rate of 13% every year, making for 51% of the annual air traffic in the near future. The target is to capitalize on the growing trend of domestic travel by air made possible by affordable prices, with the vision to increase the number of airports that see traffic of 1.5 million passengers per annum, to 70 by 2030; as of 2015, the number was 24. Banking on the impressive CAGR of air traffic per year, in the bigger picture, the Government wants to make Indian Airways the third largest passenger market in terms of million origin-destinations. Given the forging of business and cultural ties with many of the developed nations such as the United States, speculations of several destination routes being chartered are rife. This further opens up the market for Foreign Direct Investment , as the Centre believes the lucrative market will invite the US and other carriers to claim a stake in the same. The prospects of a partnership in the Indian passenger market has been turning heads from international air carriers, recent times. FDI inflows in air transport (including air freight) between April 2000 and September 2017 stood at USD 1.59 billion. India is estimated to see an investment of USD 25 billion in the next decade in the airports sector, and traffic growth of 13 per cent.

Considered as nation’s biggest tax regime, GST or Goods and Services Tax came in India on 29th March 2017 when Parliament passed Goods and Service Tax Act. GST in India came into effect on 1st July 2017. It was expected to restrain transactional costs with a unified tax system that can assist economic growth in the future. GST has not only boosted the nation’s GDP by a striking margin but it came with a number of surprises for the common people of India. GST has impacted positively on most of the private sectors. Similar to the GST implementation in other nations, India also went through some inflationary impact during the transition period of the Act. but the impact faded with the time when people started experiencing its benefits. We will roll down through the services that were impacted through GST for the common man in India. Services that became expensive with GST: Investment Management and Banking Services Life Insurance Premiums Basic Luxuries such as DTH Ticket Booking Services on the Internet Mobile Phone Bills These industries and services also became expensive at the time of GST implementation: Healthcare School and educational fees Rail/metro commute Courier services Residential Rentals Services that saw an immediate price drop after GST in India are as follows: GST council decided to include entertainment taxes under GST which made movie tickets cheaper across the country. After GST was implied in every state, dining charges in most of the restaurants/hotels turned pocket-friendly since all other extra bucks charged by hotels in the name of service charges were eliminated. Certain essential goods and vehicles saw a price drop after GST implementation. The previous supply chain was included in GST due to which two-wheelers, SUV and luxurious premium cars, small cars, and entry-level sedans became cheaper. A marginal impact came on white goods that were associated with indirect taxes such as washing machines, televisions, stoves, cosmetics, and many more. The government was determined to increase taxes on injurious/sin goods. High taxes on ‘sin goods’ such as cigarettes, other tobacco products, and aerated drinks saw a rise of around 40% on their prices. A long-term benefit for common people While most of the basic essentialities saw a price change and people criticized it at the beginning but it had its positive impacts in long term. Most of the food items and restaurants were restrained to charge extra to consumers. GST in India saw a wide range of businesses declined of extra charges to customers. Ultimately, the act has turned out beneficial for common people of India.

With ever growing M&A space in India, there has been a continuous need for good quality M&A advisors in India . With increasing number of companies adopting inorganic route to fuel their growth strategy, it is crucial for them to identify the relevant opportunities to match their growth path, to identify the existing opportunities in relevant domain and appropriate fit with in investment size of the investor. To ensure that these criteria are met, the investor companies often need support from team of strong M&A advisors in India and get necessary support starting from identification of relevant business opportunities in India. For an international investors having no prior experience in Indian market, M&A advisors in India plays a very important role in handling the most of the crucial parts of the transaction, starting from scouring the buyers/sellers, support in discussions, review of documentation and taking the transaction to conclusion. Ensuring that the investor is capturing correct investment opportunities in India, is a typical function of merger and acquisition advisory firms in India Enumerated here are some of the key elements which are typically supported by financial advisors in India. The cause and effect relationship Any investment decision is taken for few key reasons, namely to eliminate/reduce competition, to increase the market share, for expanding into new arenas or to integrate some of the activities of the business with target company to increase the capacities and profitability of business. Any M&A transactions can be tricky unless planned very carefully and thus requires a deep know how on industry dynamics, investor’s expectations with the market & such investment and very clear understanding of business evaluation strategy to ensure the key parameters for investment are met in long run. To ensure that there is a clear strategic alignment of interests of the stakeholders with proposed business to be acquired, experience of M&A advisors in India comes very handy. Regulations Proficiency M&A transactions in India or in any country typically required to be in line with applicable regulations in the home country. Financial Advisors in India provide assistance in the process on various government regulations on the sector before investments, Company Law requirements , Foreign Exchange regulations, SEBI provisions, Income Tax and GST regulations etc, as the case may be. A M&A advisory Firm in India , who is well versed with these regulations can provide a structured framework for execution of transaction and required permissions from Government. Similarly, assistance from Tax Consultants in India is generally required by international investors to get a clear view of applicable taxes in India on such transactions. M&A advisory firms and India may come with a complete perspective to provide full range of services as above. Investment growth and Exit strategy planning In order to ensure growth over the life cycle of the investment and to plan the right time to exit, it is imperative that the planning beings before the ink dries up.An investor should have an exit strategy outlined, at the time of making the investment. This makes the requirement for M&A advisors in India even more important to support the investors in this meticulous planning. GM Corporate Solutions We are one of the specialist financial advisors in India, providing consistent services in transaction advisory space. GMC being one of the leading M&A advisors in Delhi is fully equipped to provide support to the international investors in full cycle of acquisition process. Our team’s deep experience in taxation matters makes GMC a leading Tax advisory firms in India. Our experts have capabilities to provide assistance at every stage of transaction till execution of exit strategy, which helps us become one of the trusted Financial Advisors in India.

To take advantage of various investment opportunities in India, several international corporates have established their presence by entering into M&A transactions with their Indian business partners. These corporates resort to inorganic routes for diverse reasons, ranging from expanding footprints to backward/forward integration. The basic tenet is the expectation of synergy gains by the merged entity, in the form of increased revenues, cost savings, debt restructuring , increased enterprise value, pre-empt competition, tax planning, etc. During the Mergers and Acquisitions process, reaching a consensus among all the stakeholders can be arduous and is fraught with negotiations and managing expectations. This, alongside complying with all the applicable regulatory requirements, means that it often takes substantial time & resources from the initial discussions until the new enterprise structure is established. Thus, it is important that the investment in the process actually fructifies. However, in reality, the anticipated synergy gains are seldom realized. Per a survey, in more than half the cases, combined enterprise value actually declines within a year of closing the transaction. A review of such transactions reveals certain factors that need to be kept in mind, some of which are: Entity structure : The buyer’s and the seller’s rights need to be in accordance with the extent of control over key decisions that they desire to have. It is also important to be assertive about the exercise of such rights. In particular, the entry strategy for international companies needs to be evaluated from this perspective to prevent any setbacks later on. Post-deal integration path : A thorough plan for integrating the business of the seller with the buyer’s group structure is essential. This requires that the acquirers spend the necessary time to understand the business of the sellers, their vision, and how they are placed in the industry. However, in most cases, an investor-driven approach is followed without considering the dynamics of the inherent essentials of the acquired business. To avoid a showdown during the integration process, it is a must to capture the inherent commercial aspects, identify the gaps vis-à-vis expectations, and guide the process through to achieve desired results for increasing shareholder value. A seamless integration process is a must to keep the value of the business growing and have an eventual transfer of control to the buyer without any unwarranted situation with the sellers. Tracking performance : Many transactions are structured wherein the total consideration is divided into performance-linked tranches. This, in turn, relies on the reports/MIS submitted by the erstwhile management. The reliability of such reports needs to be established through meticulous supervision and observance. This is necessary particularly during the early stages of integration and in transactions where the buyer management is overseeing operations from distance or in the case of a cross-border transaction where the accounting practices are different. Actual performance : Conduct of due diligence does not mean that the acquirer can be assured of the future value that the seller business would generate. Typically, a mismatch of pre-deal and the post-deal value is observed, primarily due to variance in the actual results. Scenarios like unrealized targets, attrition of key staff, changed market scenario, diluted interest of erstwhile management, etc. are some of the key reasons for underperforming investment and need close supervision at each stage of the business, starting from the beginning before it gets too late. Reviving stagnant investments A situation may arise that either or both parties to a transaction become dissatisfied with the extant structure. This may be due to limited transparency, underperformance, process mismatches, limited operational control over the business, lack of growth, uncertainty regarding exit plans & valuations, etc. To resolve these situations, it is usually very useful to have an independent, third-party perspective to define the way forward or to implement the defined strategies. We at GM Corporate Solutions specialize in financially & strategically advising our clients in bridging the gap between the expectations and the results. Our rigorous and process-oriented approach helps determine a clear roadmap to accomplish the desired integration. We focus at turning around the business to realize the latent value, typically by supervising on reporting and as an expert board observer to achieve the intended outcomes.

The current market is flooded with entrepreneurs seeking seed capital to kickstart their venture or growth capital to take their businesses to the next level. While various success stories are published in news every day, there is also a huge number of ventures that remain capital-starved due to some reason or the other. One of the main reasons for this is an inability to garner significant interest from investors. To attract the attention of the investors and bring them to the discussion table an impressive business plan is a must. Any serious entrepreneur, whether venturing out the first time or a seasoned one, realizes the importance of the way information is communicated. A solid business plan captures & conveys the fundamentals of the business in the right manner by laying down a clear roadmap for the future. For the business plan to be effective, it is pertinent that it covers all the aspects of a business and lays down a clear futuristic approach. The following are four key elements of an effective business plan : About the Product : A well-laid description of the product to ensure that the vision is tied up with customers’ needs and market demands. The Target Market : This is about understanding the customers of the product: who they are, what they need, how much they can spend, the alternatives available to them – direct as well as indirect, etc. Business Strategy : This section tells the investors how well the entrepreneur knows the business they are engaged in and how well the business is equipped to engage with the competitive market by elaborating on a well-defined growth strategy for the future. Financials & valuations : The entrepreneur should endeavor to forecast revenues & expenses optimistically and these should also be grounded on what’s realistically achievable. It could be helpful to consult an expert on this for an objective and professional viewpoint. This would help in arriving at the appropriate value of the business in its current state and what value it could reach to in the future. Besides the above, certain other factors also need to be kept in mind to make the plan investor-ready: Self-questioning everything that forms part of the business plan to ensure that the queries from investors could be addressed. This approach serves as a crucial tool in justifying the assumptions and risk factors/underlying assertions in the business plan. It is important to keep the business plan clear and concise, free of jargon, well-researched, and formidable. Being specific is quite important in every section. Focusing on what’s specific also allows in achieving brevity. It is very important to keep coming back to the business plan periodically and updating it to cover the evolving market scenarios. It takes a lot to prepare a robust business plan that presents the business case in the best way possible. A professional knows what the investors are looking for and helps to pinpoint the areas where improvements can be made. We are one of the specialist transaction advisory firms in India . We assist our clients in formulating their business plan, financial planning, and also connecting them with the right investors for their business. Our team’s knowledge and experience across various sectors make us one of the most preferred firms for the corporate finance services required by various businesses.