Bullish Indian companies are leading the charge for acquisitions within the world’s developed economies, according to professional services organisation KPMG International.

Deals such as the £1 billion acquisition of Jaguar Land Rover by Tata Motors are a clear indication of the growing ambitions within the sub-continent to challenge the established economic order.

KPMG said the latest version of the Emerging Markets International Acquisition Tracker showed that at a time when other buyers seemed to be retreating from the mergers and acquisitions field, Indian companies’ M&A activities had not slowed over the past six months.

The latest EMIAT, which analyses deal flows between 10 selected emerging economies and 11 key developed markets, shows 35 deals between India and the developed economies in the second half of 2007, following on from 34 in the first half. The United States, struggling with the subprime fallout, is showing nowhere near the amount of resilience.

Traditionally, the US provides the bulk of the deals within the Tracker but the latest edition has seen the number of US-backed deals into the emerging economies collapse from 67 to 39, with just eight in China.

Commenting on this, Jeremy Butler, UK head of new and emerging markets at KPMG, who is based in Birmingham, said: "The EMIAT shows how China was the US’ destination of choice for some time. However, recent developments have really slowed down the American trade buyers.

"For example, many of the 'easy’, obvious deals have already been done and rules concerning the use of Special Purpose Vehicles have reduced their attractiveness as a route into China.

"On top of this, some Chinese firms now seem to prefer the idea of floating their own business, as opposed to putting themselves up for sale, as a way of securing necessary development capital."

In all, the Tracker shows 62 deals were reported with emerging market companies buying into the developed markets, while 105 deals were reported going in the opposite direction.

In the first half of 2007, those numbers were 78 and 148, meaning that the post-credit crunch decline has been less marked in the developing markets. It also means that the emerging-into-developed deals now equate to 59 per cent of the developed-into-emerging total; the closest the two totals have ever been.

"The ability of the emerging economies’ trade buyers, especially those in India, to remain resilient in the face of the post-credit crunch fall-out is commendable," said Mr Butler.

"Before we get too carried away though, we should remember that many of the deals between emerging and developed economies are at the smaller end of the value spectrum – but the important point here is that the upward trend in deal volumes is continuing."

In the first half of 2005, emerging-to-developed deals accounted for just under a quarter of the developed-to-emerging deals so that percentage has more than doubled in just two-and-a-half years.

"To see that India’s corporates have been able to remain on the acquisition trail is particularly pleasing," he added.

"Six months ago, we reported that many Indian deals were highly leveraged and that this could be dangerous if market conditions turned.

"Debt finance now typically accounts for 30-40 per cent of the purchase price being offered and, bearing in mind that most deals are in the $50 million-$80 million bracket, this does not represent a prohibitively high amount of debt. "

Mr Butler said Indian corporates and their lenders had continued to act sensibly since the credit crunch commenced, taking advantage of the retraction of financial buyers and the depreciation of the US dollar to push their growth agenda.

In addition, they are financing acquisitions though a combination of local currency denominated debt (secured on the Indian business) and foreign currency debt (mostly on the target company) which, for the size of the deals being pursued, is accepted in the current financing environment, he added. To see that India’s corporates have been able to remain on the acquisition trail is particularly pleasing