India Just Unlocked ₹5 Lakh Crore in M&A Opportunity
October 2025 marks a turning point for businesses eyeing India expansion.
The Reserve Bank lifted a two-decade ban keeping Indian banks out of acquisition financing. For the first time since 2005, domestic banks can fund M&A directly
This opens a ₹5 lakh crore market opportunity.
What Changed
Foreign companies entering India through acquisitions faced limited financing. NBFCs, private equity, and oƯshore banks dominated while Indian banks sat on the sidelines.
RBI Governor Sanjay Malhotra announced the framework change October 1, 2025. Banks now finance up to 70% of acquisition value, with companies funding 30% through equity.
The Numbers
India’s M&A market hit $120 billion in FY24. With 40% involving debt and banks capturing 30%, that’s ₹1.2 lakh crore in new lending from M&A alone.
Deal values jumped 81% to $71.5 billion in 2024. Domestic transactions represent 70% of activity, up from 63% in 2023.
Why This Matters
Cheaper capital. Indian bank debt costs less than oƯshore financing, with no withholding tax on interest payments.
Faster execution. Domestic banks familiar with Indian frameworks cut deal closure time significantly.
Mid-sized expansion becomes viable. Companies with ₹200-500 crore valuations can pursue acquisition strategies previously reserved for large conglomerates.
𝗦𝗲𝗰𝘁𝗼𝗿𝘀 𝗣𝗼𝗶𝘀𝗲𝗱 𝗳𝗼𝗿 𝗚𝗿𝗼𝘄𝘁𝗵
Pharmaceuticals and healthcare attract consistent inbound M&A. Manufacturing consolidation strengthens India’s supply chain position.
Technology services recorded 135 deals in H1 2025. Infrastructure, financial services, and renewable energy draw strategic investments.
𝗕𝗲𝘆𝗼𝗻𝗱 𝗠&𝗔
RBI raised IPO financing from ₹10 lakh to ₹25 lakh per person. Lending against shares increased from ₹20 lakh to ₹1 crore.
They removed ceilings on loans against debt securities and withdrew restrictions on lending to borrowers above ₹10,000 crore.
𝗧𝗵𝗲 𝗧𝗶𝗺𝗶𝗻𝗴 𝗔𝗱𝘃𝗮𝗻𝘁𝗮𝗴e
Guidelines take eƯect April 1, 2026. Banks develop frameworks now, creating a strategic window for companies planning India entry.
Those understanding the new landscape before competitors will structure better deals and move faster.
India attracted $81 billion in foreign investment in FY24-25. Momentum builds as financing barriers fall.
𝗧𝗵𝗲 𝗤𝘂𝗲𝘀𝘁𝗶𝗼𝗻 𝗙𝗼𝗿𝘄𝗮𝗿𝗱
Market entry through acquisition became accessible. The financing exists, regulatory support is strong, and sectors show solid trajectories.
Is your India expansion strategy positioned to leverage this shift?
Ready to explore India’s new acquisition landscape?
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