India Inc. Buys Growth: M&A Surges Past Consolidation

Indian corporations are increasingly leveraging mergers and acquisitions as a strategic tool for accelerated growth, market access, and the rapid acquisition of specialized talent and intellectual property. This trend is evident in the more than doubling of annual deal volumes since fiscal 2017, according to Crisil Ratings.

Industries like pharmaceuticals, healthcare, artificial intelligence, and enterprise technology are primarily pursuing acquisitions to secure capabilities and intellectual property that would otherwise take years to develop internally. Consumer businesses are also using M&A to bolster their market standing.

Conversely, companies in the cement and metals sectors are focusing their M&A strategies on consolidation and accelerating capacity creation. Acquisitions have proven effective in reducing the time needed for new capacity development from four to six years down to one to three years.

Despite a healthier corporate balance sheet environment, Crisil Ratings cautions that deal completion does not guarantee success. A review indicated that approximately two-thirds of large, debt-funded acquisitions met expectations, with integration challenges being the primary reason for underperformance in about half of the unsuccessful deals.