The year 2019 has been extremely active when it comes to the deal street. Cyril Shroff, managing partner of Cyril Amarchand Mangaldas spoke at length about how 2020 is going to pan out.
Shroff said we will see a positive and robust sentiment in 2020 and a repair work has started.
“However, if I look at some of the big themes of 2019 because they will foreshadow probably what will happen in 2020,” he added.
“We are at the fag end of the year, what I would remember 2019 for once it’s over – political stability and we don’t value it as much unless we around what is happening in the world and one of the thing which does strike me is we are blessed with political stability; I am not taking any particular political stand. I am just saying there is stability and if you look around in Europe and other places, you realize the value of what we will. So I will remember it for that,” added Shroff.
Talking further about 2019, he said, “I will also remember it for a slowdown. There is no question that there is a slowdown and there is an ongoing controversy as to whether it’s cyclical or structural. I am of the view that it is more cyclical, but I am no expert on this but that’s my impression of the year.”
“Deal activity was moderate but not insignificant. Sometimes we beat ourselves too much thinking there is no deal activity, but that’s not true at all. There is a lot of deal activity and some of them picked up a lot in the end because a lot of old stories came to a conclusion and that sets the stage for a clearer 2020,” said Shroff.
Speaking about 2020, Shroff said, “It’s a continuum and you will see a continuum of resolutions. There will be a couple of themes under deal activity, stressed assets and related issues whether they will be in Insolvency and Bankruptcy Code (IBC) or pre-IBC or onetime settlements or whatever, I think that will be the number one theme driving effectively change of control situations.”
“You will see a revival of foreign direct investment (FDI) as well. The reason I say this is that the market is still here whilst the private sector maybe a bit tired just now or a bit more cautious but it’s not gone away anywhere. The private sector and their entrepreneurial spirits are still very much intact. They are probably waiting for the right moment to resurface and they will resurface and if I were to take a bet then it’s more likely to be in the second half of the year,” Shroff added.
According, there is also a need to fix a lot of micro things as well.
“There are a lot of small irritants in policy which if they were sorted out could have a disproportionately positive effect on moving things forward,” he added.