Simon Collins

CEO

KPMG's corporate finance

LONDON: If the US goes the recessionary way, here's a unique spin about the impact on India. Simon Collins, global CEO of KPMG's corporate finance, doesn't think that there will be much of a trade effect in India; on the contrary, a slowdown in US may speed up the flow of talent to India.

"Anecdotally, I know that a lot of professionals are moving back to India. Any job slowdown in US will probably mean more will move," he says.

And clearly, global financial crisis or no, India is a booming market for M&A and corporate finance specialists. The message, Mr Collins says, is out and everyone wants a slice of the action.

He's really more interested in taking the mystique out of structured finance and telling Indian companies the most innovative ways of raising money than talking about the general effects of globalisation. But he also admits that right now, most of the mid-market companies in India, who are avidly looking for overseas acquisitions, don't really need very sophisticated financing options – like 100-year-bonds. But sometimes, Indian companies just want to do things because it's fashionable or glamorous, he says.

And that's where KPMG's focus in India comes in. "At one time, any M&A activity for India was about overseas companies buying things in India. Now Indian companies are looking for ways to buy entry into strategic markets overseas," says Mr Collins, who's been a regular visitor from the early 90s.

Mr Collins is spearheading the company's corporate finance thrust, and has notched up some pretty big M&A deals in recent times. And now he's focusing on the Indian market for M&A advisory, something like what Rothschild does. "A bank or an investment bank, which Indian companies have preferred till now, will not only advise, but also provide financing. There is a conflict of interest. I find that now many Indian companies are open to independent advisors," he says.

Yes, he says, often clients want a big-name investment banker "for the glamour of the association," but there is a niche for independent advisors, mostly led by top line companies turning global.

From the top line to mid-market companies, he finds Indian companies are moving out across various geographies and sectors, slowly but surely. Mr Collins sees India Inc's out-migration fuelled by different strategies; one is to gain entry into strategic markets, and here, the activity is mostly in Western Europe ; more UK, Denmark, Germany and the US.

Another good strategy is to look for less sophisticated markets as Indian consumers upgrade to higher quality products. Africa, for instance, is becoming a favourite destination for Indians. As the Indian consumer gets more demanding and sophisticated, the African market is emerging as a good option for Indian companies to shift cheaper products to.

"Indian companies are selling a lot of low-grade items, like household goods and clothing in Africa. Companies can upgrade the quality of their domestic products and sweat markets like Africa for cash," he says. Africa's a big market and does not require any energy to service, he says.

While he feels that East Europe should be an fit for India Inc, there's still not that much movement there. "Maybe because the region does not have an established diaspora," he says.