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Indian Banks Fund Rs 10,000 Cr M&A After Rule Easing
22 Oct
Summary
- Indian banks financed over a dozen M&A deals worth ₹10,000 crore.
- Revised RBI rules allow lenders to finance up to 75% of acquisition value.
- SBI, HDFC Bank, Kotak Mahindra Bank among active domestic lenders.
Following the Reserve Bank of India's (RBI) revised framework effective July 1, Indian banks have financed approximately twelve M&A deals, amounting to over ₹10,000 crore in acquisition funding. This easing of takeover-financing rules allows domestic lenders to fund up to 75% of a target's acquisition value, subject to risk management guidelines.
State Bank of India has been particularly active, involved in numerous transactions. Other key domestic players like HDFC Bank, Kotak Mahindra Bank, ICICI Bank, Axis Bank, and RBL Bank have also participated. International banks such as HSBC and Citibank are also part of this renewed M&A financing landscape.
The revised regulations have unlocked substantial lending opportunities, with the potential acquisition-financing market estimated at ₹2 lakh crore. Previously, restrictions on domestic funding had led to a greater reliance on overseas lenders and private credit funds. Notable deals financed include Crystal Crop Protection's acquisition of FMC Corporation's India business for ₹2,268 crore.
