India Inc turns to M&A strategy as deal volumes surge sharply

Indian corporates have significantly ramped up acquisition activity over the past six years, embracing M&A as a primary vehicle for business expansion and market consolidation. The surge in deal volumes underscores a strategic pivot among India Inc, which is leveraging inorganic growth opportunities to achieve faster scaling and competitive gains in an increasingly dynamic business environment.

Crisil's analysis indicates that the doubling of annual M&A volumes since fiscal 2017 coincides with a period of moderating financial leverage and declining capital expenditure intensity across Indian companies. This suggests that businesses are opting for acquisition-led growth strategies over organic expansion through heavy capital investment, a trend that reflects both improved financial discipline and the attractiveness of acquiring established market positions.

The shift toward M&A activity reflects changing corporate priorities, with companies seeking to diversify portfolios, enter new markets, and acquire specialized capabilities more rapidly than internal development would allow. This strategic approach has gained traction as companies navigate competitive pressures and seek operational efficiencies through consolidation.

The trend is expected to sustain as Indian companies continue evaluating acquisition targets to strengthen market presence, complement existing operations, and accelerate digital transformation initiatives. Industry analysts note that improved access to capital and a deeper pool of acquisition targets across sectors have made M&A an increasingly viable growth pathway for India Inc.