India since the early 90s has been noted as a nation which has the potential of becoming the next super economy in the coming years. With China’s development reaching unimaginable progress in the past 10 years, it has kicked in a ray of assurance in India for making their dream come true. The dream now not only looks achievable but also closer and has grown bigger with the coming years.
The potential ground for investment
As per experts, despite Indian economy getting billions of dollars as FDI, it is yet to achieve the level reached by China. Although considered to be a friendly institutional investor, India in the race of development has so far remained just a story.
Irrespective of speculations by expert economists regarding the growth rate of India in the next 5 to 10 years is reap, two mega events which took place on the investments front has changed the game completely. The recent event namely the Walmart-Flipkart deal has set India in a new pathway of economic growth. After a plethora of mistakes and wrong takes, India is finally leading towards correcting its errors and making sound decisions. A GDP growth of 9 to 10%, thus, doesn’t seem like a dream anymore.
Flipkart-Walmart Deal
The very first mega-deal which grabbed a lot of attention and turned into a news overnight is the acquisition of Flipkart by the International retail giant Walmart for $16 billion. This deal which is considered the biggest mega-merger till date has already kick-started the betterment of Indian economic ecosystem. So far, the deal has earned the investors an approximate of $16 billion in addition to making its founders richer by $1 billion. Even though this deal was considered to be a big boon for the investors and financiers, it has also helped in setting in pace the Indian economy.
How will the deal affect the Indian economic growth?
Since the time, India began with Private Equity and Venture Capital investments, one prime complaint from most of the investors has been the lack of exits. This meant that although money could enter Indian grounds, it was fairly impossible to trade back the same. However, this has seen a perpetual change with Redbus acquiring Naspers. The momentum was started by RedBus, which took over Naspers when Seedfund made a gradual exit. However, for Flipkart, it still remained a topic of worry. With more than $7 Billion investment, it was worried about its exit. This could be sorted if any company tiny or small showed their interest in investing in the Indian ground, through having little exposure to Flipkart either through direct investment or by investing in funds.
According to reports, the liquidity of $16 billion acquired through this deal will aid in erasing all the doubts and eventually lead to more capital hitting the Indian market.
The next big question
The next big question is who would prove to be Amazon for India, whether it would be Amazon or Flipkart. This has been well answered by giants like Ola, Paytm, Flipkart and many others. The present merger has set in a ray of hope for more Indian start-ups and global model start-ups thereby increasing the economic growth of India to a newer extent.
How will the deal impact the nation towards Economic growth?
The Flipkart-Walmart deal will help in generating more capital for the economy, thereby bringing in more foreign investment into the Indian grounds. This will later have an impact on the surge in offering jobs for more masses and thereby kickstart the Indian economy in the right direction.
A new era for the Indian economy
The new modulated law is contemplated to pave the capital towards hardworking and honest businesses in India who remain unproductive due to lack of capital and its high cost. This will find more capital getting connected to big businesses now finding a way to normal businesses too.
The mega-mergers of Walmart-Flipkart is all set to end the 70-year-old monopoly of relying on connections. These two events have ended this theory forever leading capital in safer hands and hardworking businesses in addition to paving way for an easier exit in order to reduce NPAs.
