India Inc M&A Volumes More Than Double From FY17 Levels as Acquisitions Become Core Growth Strategy

India Inc M&A Volumes More Than Double From FY17 Levels as Acquisitions Become Core Growth Strategy

Indian companies are increasingly treating mergers and acquisitions as a core growth strategy rather than an occasional route to expansion, with annual M&A volumes more than doubling from fiscal 2017 levels.

A new analysis by Crisil Ratings shows that stronger corporate balance sheets, lower leverage and more disciplined funding are giving Indian businesses greater flexibility to acquire competitors, enter new markets and obtain capabilities that could take years to develop internally.

The analysis covered around 600 transactions valued above ₹500 crore each across 20 sectors, excluding financial services, infrastructure, private-equity-led transactions and inbound deals.

The shift represents an important change in corporate strategy.

Indian companies historically relied heavily on organic growth through:

new factories,

distribution expansion,

product development,

and internal investment.

They are now increasingly asking a different question:

Can buying an existing business deliver the same strategic objective faster?

For many companies, the answer is increasingly yes.

Annual M&A Volumes Have More Than Doubled Since FY17

Crisil Ratings says annual M&A deal volumes among Indian corporates have:

more than doubled since FY17.

The growth reflects a broader transformation in how companies allocate capital.

Acquisitions are being used to:

increase scale,

enter new markets,

acquire technology,

gain intellectual property,

secure talent,

and vertically integrate operations.

The strategic rationale differs by industry, but the central theme is speed.

Companies Are Using Acquisitions to Grow Faster

Organic expansion can take years.

A company entering a new category may need to:

build products,

hire teams,

develop distribution,

acquire customers,

and establish credibility.

An acquisition can provide many of those capabilities immediately.

The buyer acquires an operating business rather than constructing one from scratch.

That can significantly shorten the time required to enter a market.

Consolidation Is the Biggest M&A Driver

Crisil's analysis found that approximately:

36%

of deals were driven primarily by:

consolidation.

This makes consolidation the largest strategic rationale behind the transactions examined.

Companies are buying competitors or complementary businesses to increase market share and achieve greater operating scale.

Capability Acquisition Accounts for 18%

Approximately:

18%

of transactions were driven by the need to acquire new capabilities.

Those capabilities can include:

technology,

specialised talent,

intellectual property,

or product expertise.

This is becoming particularly relevant as technology changes faster than many companies can build internal capabilities.

Market Expansion Represents 17%

Another:

17%

of transactions were focused on expanding into new markets.

An acquisition can provide immediate access to:

customers,

distribution,

brands,

and local operating knowledge.

That is particularly attractive when entering another geography.

Building those relationships organically can require years.

Vertical Integration Accounts for 13%

Approximately:

13%

of acquisitions were driven by vertical integration.

A company may acquire:

a supplier,

distributor,

manufacturer,

or another part of its value chain.

The objective can be to improve:

supply security,

margins,

quality control,

or operational efficiency.

Vertical integration has become particularly relevant during periods of global supply-chain uncertainty.

Stronger Balance Sheets Are Enabling More Deals

One of the biggest differences between today's acquisition cycle and earlier periods is corporate leverage.

Median net debt-to-Ebitda among Crisil-rated companies is estimated at around:

1.3 times in FY26.

That compares with approximately:

2.4 times in FY17.

The decline means many Indian companies enter the current M&A cycle with significantly healthier balance sheets.

Lower Leverage Creates Acquisition Capacity

A highly indebted company has limited flexibility.

It must allocate cash toward:

interest,

repayments,

and refinancing.

A company carrying lower debt can use more capital for:

acquisitions,

investment,

and expansion.

Lower leverage also allows companies to borrow selectively when attractive acquisition opportunities arise.

India Inc Has Learned From Previous Debt Cycles

Indian corporate history contains examples of acquisitions funded with excessive leverage.

Some deals created substantial stress when:

economic conditions weakened,

expected synergies failed,

or cash flows did not materialise.

Many companies spent years repairing their balance sheets.

The current cycle appears more disciplined.

Debt Funding Has Become Less Dominant

Debt accounted for approximately:

29% of M&A funding during FY24–FY26.

That compares with:

46% during FY09–FY11.

This represents a significant change in acquisition financing.

Companies are increasingly using funding structures designed to limit the increase in leverage after transactions.

Equity Markets Are Playing a Larger Role

Indian companies have raised significantly more equity during recent years.

Equity raised during FY21–FY26 was approximately:

four times

the amount raised during FY15–FY20.

Importantly, a greater proportion of that equity has been used to strengthen balance sheets rather than finance aggressive capital expenditure.

That provides companies with greater flexibility when acquisition opportunities appear.

Capital Expenditure Intensity Has Moderated

Crisil estimates corporate capex intensity declined from around:

0.6 times in FY17

to:

0.5 times in FY26.

Companies therefore have somewhat less capital committed to large organic investment programmes relative to their financial capacity.

This creates another source of balance-sheet flexibility.

Geopolitical Uncertainty Is Making Companies More Selective About New Capex

Building new capacity requires long-term confidence.

A company constructing a factory today may depend on demand conditions five or ten years from now.

Geopolitical instability creates uncertainty around:

trade,

commodity prices,

currency,

and supply chains.

Some companies therefore prefer acquiring proven operating businesses rather than committing large amounts of capital to greenfield expansion.

M&A Can Reduce Execution Time

In sectors such as cement and metals, Crisil estimates acquisitions can reduce capacity-development timelines from:

four to six years

for greenfield projects

to approximately:

one to three years

through acquisition.

That speed can be strategically valuable.

A company can acquire:

existing factories,

licenses,

customers,

and employees

rather than waiting years for a new project to become operational.

Cement Is a Natural Consolidation Market

Cement manufacturing requires significant:

land,

mining rights,

plants,

logistics,

and capital.

Building new capacity can take years.

Acquiring an existing producer provides immediate operating capacity.

This makes consolidation particularly attractive when companies want to expand rapidly into new regions.

Metals Companies Also Use M&A to Gain Capacity

Steel and metals businesses operate similar economics.

Plants are:

capital intensive,

complex,

and expensive to build.

Acquisitions can allow companies to obtain existing production capacity and associated infrastructure more quickly.

This can accelerate industry consolidation.

Technology Companies Are Buying Capabilities

The strategic rationale is different in technology.

A software company may not need another factory.

It may need:

AI technology,

software engineers,

data,

or intellectual property.

Building such capabilities internally can take years.

Buying a specialist technology company can provide immediate access.

AI Is Accelerating Capability-Driven M&A

Artificial intelligence is moving unusually quickly.

Many established companies do not have the time to build advanced AI teams internally from zero.

Acquiring:

AI startups,

specialist software firms,

or technology teams

can provide a faster route.

This is creating a growing category of capability-driven acquisitions.

Talent Itself Can Be an Acquisition Asset

In some technology transactions, the most valuable asset is not the company's revenue.

It is the employees.

Acquiring an organisation can provide:

engineers,

researchers,

and domain experts

who would otherwise be difficult to recruit individually.

This is sometimes described as an acqui-hire.

Pharmaceutical Companies Are Buying Pipelines and Technology

Pharma and healthcare companies also use M&A to obtain capabilities.

A pharmaceutical acquisition may provide:

new products,

research pipelines,

manufacturing facilities,

or market access.

Developing a drug or formulation internally can take many years.

Acquiring a company with an established portfolio can accelerate growth.

Healthcare Offers Consolidation Opportunities

Healthcare remains fragmented across:

hospitals,

diagnostics,

specialty care,

and health technology.

Larger organisations can use acquisitions to build:

regional networks,

specialist capabilities,

and broader patient reach.

The sector therefore supports both consolidation-driven and capability-driven transactions.

Consumer Companies Are Buying Brands

Consumer businesses increasingly use acquisitions to obtain brands that already have loyal customers.

This is particularly visible in:

beauty,

food,

fashion,

and direct-to-consumer businesses.

Large consumer companies can combine their distribution strength with the acquired company's brand equity.

Building a Brand Organically Can Take Years

Consumer trust cannot always be created quickly.

A successful brand may already possess:

recognition,

customer loyalty,

and product-market fit.

Acquiring it can be faster than launching a competing label.

This is particularly attractive when consumer trends are changing rapidly.

D2C Brands Have Become Acquisition Targets

India's D2C ecosystem has created numerous digitally native brands.

Some have developed significant customer bases without building traditional distribution networks.

Larger consumer companies increasingly see these businesses as a source of:

digital capabilities,

younger customers,

and specialised brands.

Acquisitions therefore provide a bridge between traditional consumer companies and new digital commerce models.

Two in Three Large Debt-Funded Deals Met Expectations

Crisil reviewed around:

100 large debt-funded acquisitions

involving:

50 rated acquirers

over the 10 financial years ended March 31, 2025.

Approximately:

two out of three deals

broadly met expectations.

That is important because M&A success is never guaranteed.

Successful Deals Expanded Scale by 20%–80%

Among the more successful acquisitions, companies achieved approximately:

20% to 80% expansion in scale

within:

one to two years.

These deals also widened geographic presence and often improved margins after synergies began materialising from the second year.

This illustrates why companies continue pursuing acquisitions despite execution risks.

Synergies Are Central to M&A Economics

A company generally pays for an acquisition because it believes the combined business will be worth more than the two businesses operating separately.

That additional value is called:

synergy.

Synergies can come from:

lower procurement costs,

reduced duplication,

better distribution,

or higher revenue.

The transaction creates value only if those benefits are actually realised.

One-Third of Deals Underperformed Expectations

Around:

one-third

of the debt-funded acquisitions reviewed by Crisil produced weaker-than-expected business outcomes.

This demonstrates the central danger of M&A.

Buying a company is relatively straightforward.

Integrating it successfully is much harder.

Integration Was the Largest Problem

Integration challenges accounted for approximately:

half of weaker M&A outcomes.

This makes post-acquisition integration the single largest execution risk identified in the study.

Companies may underestimate the difficulty of combining:

technology,

employees,

processes,

and corporate cultures.

Culture Can Destroy Deal Value

Two financially attractive businesses can still be difficult to combine.

Employees may have different:

incentives,

leadership styles,

and decision-making systems.

Key talent can leave after the acquisition.

The buyer can lose the very capability it was attempting to acquire.

Cultural integration therefore matters as much as financial modelling.

Technology Integration Can Also Be Difficult

Companies frequently operate different IT systems.

After a merger, management may need to integrate:

ERP software,

customer databases,

finance systems,

and operational technology.

Poor integration can create:

service disruption,

higher costs,

and delayed synergies.

This is especially challenging in large cross-border deals.

Regulatory Delays Were Another Major Risk

Regulatory delays accounted for approximately:

one-fifth

of weaker outcomes in Crisil's analysis.

Large acquisitions may require approvals from:

competition authorities,

sector regulators,

or foreign governments.

A transaction can therefore be commercially attractive but still become delayed for months or years.

Cross-Border Execution Added Further Risk

Cross-border execution issues also accounted for roughly:

one-fifth

of weaker outcomes.

International acquisitions introduce additional complexity.

Companies need to manage:

currencies,

laws,

tax systems,

and cultural differences.

The potential strategic rewards are significant, but execution requirements are much higher.

India Inc Is Increasingly Acquiring Overseas Assets

Indian companies are becoming more active buyers of international businesses.

Outbound deals can provide:

technology,

brands,

and global distribution.

Indian corporate balance sheets are now strong enough for more companies to pursue assets that would previously have been difficult to finance.

Outbound Deal Value Has Accelerated

India's broader deal market has already shown signs of this trend.

During the second quarter of 2026, overall Indian deal value rose sharply as several large outbound acquisitions increased transaction values.

This suggests India's M&A evolution is not limited to domestic consolidation.

Indian companies are increasingly becoming global buyers.

Acquisitions Can Shorten Global Expansion by Years

Entering a foreign market organically can require:

local offices,

distribution,

regulatory approvals,

and customer acquisition.

Buying an established local business provides much of this infrastructure immediately.

That makes M&A attractive for Indian companies seeking faster international expansion.

Existing Brands Can Be Particularly Valuable

Brand recognition can take decades to build.

An Indian company purchasing an established overseas brand can gain immediate credibility.

That can be especially valuable in:

consumer products,

luxury,

and pharmaceuticals.

The acquisition provides not simply revenue but a market position.

Stronger Rupee Funding Capacity Can Support Overseas Deals

Large Indian companies increasingly have access to multiple funding sources.

These include:

domestic debt,

international bonds,

and internal cash flow.

Financial sophistication gives companies greater flexibility when structuring international acquisitions.

Most Acquirers Retained Credit Strength

Crisil found that approximately:

three-fourths

of ratings were either:

reaffirmed

or:

upgraded

after acquisitions.

Approximately:

25%

experienced ratings downgrades.

This suggests that most transactions did not materially weaken the acquirer's overall credit profile.

Around 60% Deleveraged Within Two Years

Approximately:

60% of acquirers

reduced leverage either:

on schedule

or:

ahead of schedule

within two years following their acquisitions.

This is another indication that many Indian companies are approaching M&A with greater financial discipline.

Deleveraging Matters After a Deal

An acquisition financed partly through debt can temporarily increase leverage.

That is not necessarily a problem.

The key question is whether the combined business generates enough cash flow to reduce that debt afterward.

Successful deals often follow a pattern:

acquire,

integrate,

generate synergies,

and deleverage.

Excessive Leverage Remains Dangerous

Problems arise when companies pay too much or borrow too aggressively.

If expected growth fails to appear, debt remains.

This can lead to:

ratings downgrades,

lower investment,

or financial restructuring.

Strong balance sheets before an acquisition therefore provide valuable protection.

Valuation Discipline Is Critical

A strategically attractive company can still be a bad acquisition if the buyer overpays.

Companies compete against other bidders.

Management can become emotionally committed to completing a transaction.

This sometimes results in paying valuations that future cash flows cannot justify.

Disciplined capital allocation requires the ability to walk away.

Due Diligence Matters

Before buying a company, an acquirer needs to understand:

financial statements,

contracts,

legal risks,

and operational weaknesses.

Problems discovered after closing are usually much more expensive to fix.

Strong due diligence therefore protects acquisition economics.

M&A Requires Different Management Skills From Organic Growth

Running an existing business effectively does not automatically mean a company will be good at acquisitions.

Successful acquirers need specialised skills around:

valuation,

negotiation,

integration,

and capital structure.

Companies that acquire repeatedly can build institutional expertise.

Repeat Acquirers Can Develop an Advantage

Some global companies have created entire growth strategies around disciplined acquisitions.

They develop playbooks covering:

target identification,

due diligence,

integration,

and performance tracking.

Indian companies pursuing more deals may increasingly build similar internal M&A capabilities.

Corporate Development Teams Will Become More Important

Large Indian companies are expanding internal teams dedicated to:

strategy,

M&A,

and corporate development.

These professionals constantly evaluate:

markets,

technologies,

and potential targets.

As acquisitions become a core strategy, these functions move closer to senior management and boards.

Boards Need Greater M&A Oversight

Large acquisitions can reshape an entire company.

Boards therefore need to evaluate:

strategic fit,

financial risk,

and integration planning.

A transaction should not be approved simply because it increases revenue.

It must create long-term shareholder value.

M&A Can Improve Return on Capital — or Destroy It

Acquisitions can generate excellent returns when:

purchase prices are disciplined,

synergies materialise,

and integration works.

But unsuccessful transactions can permanently destroy capital.

The difference often becomes visible only several years later.

This makes post-deal performance tracking essential.

Organic Growth Still Matters

The rise of M&A does not mean companies should stop investing internally.

Successful businesses usually require a combination of:

organic development

and:

acquisitions.

Organic investment builds internal capabilities.

M&A accelerates expansion where the economics are superior.

The key is choosing the correct tool for each strategic objective.

Acquisitions Work Best When Integrated With Core Strategy

Buying unrelated businesses simply because capital is available can create conglomerate complexity.

The strongest transactions usually have a clear connection to:

existing customers,

capabilities,

or markets.

Strategic fit makes it easier to generate synergies.

India’s Stronger Corporate Balance Sheets Change the Opportunity

The current M&A wave differs significantly from earlier cycles.

Corporate leverage has fallen.

Equity markets are deeper.

Domestic financing is stronger.

And many Indian companies have accumulated significant cash.

These conditions provide a stronger foundation for inorganic growth.

India’s Economic Scale Creates More Domestic Targets

The Indian economy itself is creating more acquisition opportunities.

As companies grow across:

manufacturing,

healthcare,

and consumer markets,

the number of viable acquisition targets increases.

The M&A ecosystem therefore becomes deeper as the economy matures.

Startup Ecosystem Adds New Targets

India's startup boom has also created hundreds of specialised companies with:

technology,

brands,

and talent.

Some will eventually become large independent businesses.

Others will become acquisition targets for established companies.

This creates a new pipeline of strategic M&A opportunities.

IPO Markets and M&A Markets Can Coexist

Founders and investors do not have only one exit route.

A successful company may:

list publicly,

merge with another company,

or sell to a strategic buyer.

A healthy capital market provides multiple options.

India's increasingly active M&A market therefore strengthens the broader entrepreneurial ecosystem.

The Next M&A Cycle Could Be More Strategic

The early Indian acquisition cycles often focused heavily on:

capacity,

and physical assets.

The current cycle increasingly includes:

AI,

technology,

talent,

and intellectual property.

This reflects how corporate value itself is changing.

The assets companies need are increasingly intangible.

Conclusion

India Inc's annual M&A volumes having more than doubled from FY17 levels signals a structural change in how Indian companies think about growth.

Crisil Ratings' analysis of roughly 600 transactions worth more than ₹500 crore each shows that acquisitions are increasingly being used to accelerate scale, consolidate industries, enter new markets and acquire capabilities that companies cannot develop quickly enough internally.

The financial backdrop is also considerably stronger than during earlier acquisition cycles.

Median net debt-to-Ebitda among Crisil-rated companies has declined from around 2.4 times in FY17 to approximately 1.3 times in FY26, while debt now accounts for a smaller share of M&A funding.

That balance-sheet strength is giving companies greater capacity to transact without putting excessive pressure on credit profiles.

The strategic motivations are becoming more diverse as well.

Consolidation accounts for 36% of deal rationale, capability acquisition 18%, market expansion 17% and vertical integration 13%.

The success rate is encouraging but not universal.

Around two-thirds of the large debt-funded acquisitions examined broadly met expectations, while roughly one-third underperformed, most commonly because of integration problems, regulatory delays or cross-border execution challenges.

That provides the central lesson of India's new acquisition cycle.

Buying growth is becoming easier.

Creating value after the acquisition remains the difficult part.

As Indian companies become larger, better capitalised and more internationally ambitious, M&A is likely to remain an increasingly important part of corporate strategy. The long-term winners will be the companies that combine this new financial capacity with valuation discipline, strong integration capabilities and a clear understanding of when acquiring a business creates more value than building one organically.