As 2025 draws to a close, India's corporate landscape has been reshaped by a significant surge in merger and acquisition (M&A) activity, with cross-border transactions leading the charge. Industry leaders confirm this momentum is not a flash in the pan but a robust trend set to accelerate through 2026. This growth is fueled by India's economic resilience, strong investor appetite, and a supportive policy environment, even as the bustling IPO market presents a competitive alternative for capital.
By the Numbers: A Record Year for Cross-Border Activity
The data for 2025 tells a compelling story of global confidence in India and Indian ambitions abroad. According to Venture Intelligence, the year witnessed approximately 99 inbound deals valued at $28.9 billion and 135 outbound transactions worth $16 billion. This marks a substantial jump from 2024, which saw 175 inbound deals worth $15.1 billion and 126 outbound deals at $7.3 billion. The sheer scale of individual deals underscores this bold new phase.
Strategic megadeals dominated headlines. These included Japan's MUFG investing $4.4 billion in Shriram Finance, Emirates NBD acquiring a majority in RBL Bank for $3 billion, and Tata Motors' $4.5 billion purchase of Iveco. Other major transactions were Capgemini's $3.3 billion acquisition of WNS Global Services and Schneider Electric's $6.4 billion deal for Lauritz Knudsen.
Drivers of the Deal-Making Frenzy
Experts point to a powerful confluence of factors propelling this M&A wave. Nitin Maheshwari, Co-head of India Investment Banking at JP Morgan, observes that Indian companies now view acquisitions as a core strategy for rapid growth and market consolidation. "Deals are certainly becoming larger and bolder, and we expect that to continue," he stated, noting the use of strong balance sheets and favorable currency valuations for international buys.
The strategic shift is underpinned by India's macroeconomic strengths: profitable corporate growth, robust domestic consumption, and government focus on infrastructure and energy transition. Rahul Saraf, Head of Investment Banking at Citi India, highlighted the crucial policy tailwinds: "Government and regulators are pushing the pedal on growth–relaxing FDI limits in sectors like insurance and defence, enabling ease of doing business, and relaxing funding avenues."
India's rising stature in global indices is also a key magnet. A recent Morgan Stanley report noted India's weight in the MSCI Emerging Markets Index has more than doubled to 16% from 8% in five years, while China's share has fallen. India has also surpassed China to become Asia's largest private exits market.
Sector Spotlight and Future Outlook for 2026
The action has been broad-based. Amitabh Malhotra, Vice-Chairman of Capital Markets & Advisory at HSBC India, identified financial institutions, manufacturing, technology, healthcare, and infrastructure/renewables as leading sectors. The landscape is also being transformed by deep-pocketed investors.
Klaas Oskam, Managing Director and CEO of DC Advisory, pointed to the rise of control-oriented investing. Global PE giants like Blackstone, EQT, and KKR, alongside domestic funds like ChrysCapital and Kedaara, are sitting on large war chests. "Average transaction sizes are bound to increase, and we foresee this trend to continue," Oskam explained.
Geographically, interest from Japanese strategic investors and Gulf Cooperation Council (GCC) countries has intensified, a trend expected to persist. Citi's Saraf noted Japanese firms are active in financial institutions, while Middle Eastern players are focused on infrastructure and banking.
Looking ahead, the dynamic between a red-hot IPO market and M&A will be crucial. While IPOs have offered attractive exits, raising over $21 billion in 2025, experts believe both channels will synergize. Maheshwari argued that strong public markets boost confidence for acquisitions. Oskam added that newly public companies, under pressure to justify valuations, will themselves become active acquirers in 2026, using their stock as currency for strategic buys both in India and overseas.
The consensus is clear: after a landmark 2025, India's deal-making ecosystem is poised for an even bigger, bolder, and more strategic year in 2026.
