Archive · 29 Dec 2025
Indian M&A Activity Surges in 2025
In 2025, India saw a lot of big company mergers and acquisitions (M&A).
The Reserve Bank of India (RBI) is planning to change some rules to make it easier for banks to help with these deals.
Currently, banks in India can't lend money for companies to buy other companies, except for infrastructure projects.
The RBI wants to change this so that banks can provide more support for M&A activities.
The new rules will start in April 2026 and will have some strict conditions to make sure everything is safe and stable.
This will help Indian companies grow bigger without having to rely too much on foreign loans.
M&A activity in India reached nearly $120 billion in 2024 and $50 billion in the first half of 2025.
The RBI proposed changes to permit acquisition finance, widening the scope of lending against securities.
The new RBI directions will come into effect from April 1, 2026, and will apply to all commercial banks except small finance banks, regional rural banks, local area banks, and payments banks.
Banks will be allowed to finance acquisitions involving controlling stakes, subject to certain prudential limits and conditions.
The RBI has set strict eligibility criteria for both borrowers and targets to ensure long-term value creation and reduce systemic risk.
- Who
- Indian companies, commercial banks, RBI, SEBI, investors
- What
- Surge in M&A activity in India, RBI's proposed changes to acquisition finance regulations
- When
- 2024-2026
- Where
- India
- Why
- To support domestic capital flows, reduce exposure to external shocks, and enable Indian corporates to execute complex transactions
- Total M&A Deals in 2024
- $120 billion
- M&A Deals in H1 2025
- $50 billion
- RBI Proposed Changes
- Permit acquisition finance, widen lending against securities
- Effective Date of New RBI Directions
- April 1, 2026
- Borrower Eligibility
- Listed Indian body corporate with satisfactory net worth and 3 years of profitability
- Target Eligibility
- 3 years of audited financials, not a related party
- Bank Exposure Limit
- 10% of Tier 1 capital
- Bank Funding Limit
- 70% of acquisition value, 30% from acquirer's equity
Sources
SEBI walks a fine line in 2025 on ease of doing business and tough enforcement
Indian equities recover in 2025 after correction, earnings, rate cuts key in 2026
2025 was more about execution than new rules, says COO of Kotak Securities
SEBI walks a fine line in 2025 on ease of doing business and tough enforcement
Enabling acquisition finance
Cross-border deals go bigger and bolder—2026 promises more
