Indian companies are increasingly leveraging acquisitions to secure advanced technologies, skilled talent, and intellectual property, transforming M&A from an occasional tool into a core growth strategy, finds Crisil Ratings.
- M&A volumes have doubled since fiscal 2017 across 20 Indian sectors
- Tech-driven sectors use acquisitions to bridge skill and IP gaps
- Two-thirds of major debt-funded deals meet or exceed expectations
What happened
Crisil Ratings analyzed close to 600 major deals in India involving valuations above Rs 500 crore, highlighting a marked rise in M&A activity across diverse sectors such as artificial intelligence, pharmaceuticals, enterprise tech, and consumer businesses. Indian companies are increasingly using acquisitions to gain technology, talent, and intellectual property, turning M&A into a core strategic lever rather than a one-off growth option.
The study found that sectors like pharma and AI are primarily pursuing acquisitions to fill internal capability gaps, while industries such as cement and metals focus on consolidation and accelerating project timelines. This acquisition momentum coincides with improved financial health among companies, characterized by lower leverage and greater resilience to integration risks.
Why it matters
The transformation of M&A into a strategic growth tool signals a shift in how Indian corporations plan expansion and capability building. Acquisitions enable faster scale-up, quicker access to new markets, and the procurement of hard-to-build capabilities, especially in technology-driven sectors where organic development may take several years.
Financial prudence supports this trend, with median net debt-to-EBITDA ratios improving significantly since 2017. While most acquisitions have yielded positive credit outcomes and enhanced scale, about one-third face challenges from integration, regulatory hurdles, or cross-border complications, highlighting the importance of disciplined execution.
What to watch next
Going forward, Indian companies’ ability to balance acquisition-led growth with organic innovation and capability development will be critical to sustaining long-term value creation. Continued investment in core technologies and skills alongside M&A will determine success in competitive and fast-evolving markets like AI and enterprise solutions.
Stakeholders should monitor credit and operational performance post-acquisition, as well as evolving deal structures and sectors driving M&A activity. Improvements in integration processes and regulatory navigation will also be key indicators of future M&A effectiveness and business expansion in India.