Corporate M&A 2026 Comparisons

The Indian M&A market grew significantly in 2025, with 963 announced deals aggregating to approximately USD60.2 billion, up 36% by value and 41% by volume over 2024. This growth reflects sustained interest in India’s long-term growth trajectory and a relatively resilient economy amid global macroeconomic volatility.

Domestic strategic transactions accounted for a significant proportion of deal activity, with Indian corporates pursuing acquisitions to consolidate market positions, integrate supply chains and expand into adjacent business verticals. Inbound investment has remained robust, with global investors viewing India as a key market for long-term strategic investment, particularly for manufacturing and industrial investment. Indian companies have simultaneously pursued selective outbound acquisitions in sectors such as technology services, speciality chemicals and pharmaceuticals to acquire intellectual property, access markets and enhance capabilities.

Shift Towards Strategic Influence and Control

Investor preferences have shifted from passive minority stakes towards transactions conferring operational influence and control. The average inbound deal size rose from approximately USD44 million in 2024 to nearly USD242 million in 2025, reflecting a market oriented towards longer-term, strategic acquisitions with greater investor involvement in management and direction.

Consolidation and Platform Expansion in Domestic Industries

A defining feature of recent M&A activity in India has been consolidation within established industries. Large corporate groups have increasingly relied on acquisitions to strengthen core businesses, integrate supply chains and improve operating efficiency, with transactions focused on expanding existing platforms rather than diversification. This consolidation has been particularly visible in high-growth sectors such as fintech, logistics and education technology, to establish competitive scale ahead of market maturation.

Capability-Driven Acquisitions in Domestic Technology and Global Markets

Indian companies are increasingly using acquisitions to strengthen technological capabilities and expand global competitiveness. Technology transactions often involve mid-sized, specialised targets with expertise in areas such as software development, artificial intelligence and digital infrastructure. Outbound acquisitions have similarly targeted product expertise, engineering capabilities and distribution networks.

Manufacturing and Industrial Platforms

Manufacturing attracted significant deal activity, with 144 deals accounting for 15% of total activity. Acquisitions targeted production capacity expansion and domestic supply chain integration. Production Linked Incentive schemes, together with the broader “Make in India” programme, have also encouraged domestic and foreign investments in the manufacturing sector.

Banking and Financial Services

The banking and financial services sector generated considerable deal activity, with deals contributing over 26% of total M&A deal value. Transactions were driven by capital infusions into banks, consolidation among non-banking financial companies and foreign investment seeking exposure to India’s expanding credit market. Rising regulatory oversight and funding pressures have driven consolidation, improving capital adequacy and operational resilience.

Technology and Digital Infrastructure

Technology-led transactions were among the most active segments of India’s M&A landscape, with aggregate deal values estimated at USD27.5 billion, representing a three-year high and an increase of 30% over the USD20 billion recorded in 2024. Companies across industries have acquired specialised technology firms to enhance digital capabilities. Investment in digital infrastructure, particularly data centres, has also grown, driven by increasing demand for data storage and processing capacity across the economy.

Energy and Renewable Power

Energy and infrastructure assets, particularly renewable power platforms, attracted strong investor interest, with 83 transactions in 2025 having an aggregate deal value of approximately USD7 billion. Strategic buyers and long-term institutional investors have actively pursued acquisitions in the sector, driven by the stability of contracted revenues, India’s renewable energy targets and supportive regulatory frameworks.

Acquisitions of companies or businesses in India are primarily structured through one of the following legal mechanisms:

• Share acquisitions: The most common method is the acquisition of equity securities of the target. Transactions may involve secondary purchases or primary investments, with consideration payable in cash or through non-cash consideration, including share swaps. For listed companies, open offers under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“Takeover Regulations”) (refer to 4.1 Principal Stakebuilding Strategies) serve as a mechanism for purchasing shares from public shareholders.
• NCLT-approved schemes: Acquisitions and group restructurings may also be carried out through schemes of arrangement under the Companies Act, 2013, which require approval of the National Company Law Tribunal (NCLT). This mechanism is typically used for mergers or multi-entity reorganisations, and allows for several transactions including demergers, capital restructuring and share swaps within a single, court-sanctioned process. While this provides considerable structural flexibility, such schemes involve longer timelines due to statutory approval processes. A fast-track merger process is available for small companies, start-ups, holding companies and their wholly owned subsidiaries, and fellow subsidiaries. The framework was extended in 2024 to permit reverse-flip mergers of foreign holding companies into wholly owned Indian subsidiaries.
• Acquisition in insolvency process: Acquisitions of distressed companies may occur through the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016, which is also overseen by the NCLT. Via this route, control of the target is acquired by resolution plan approved by creditors and the NCLT under which the target’s liabilities are typically restructured.
• Business transfers: Acquisitions of specific business divisions or operational units may be structured as a “slump sale” – the transfer of an undertaking on a going-concern basis together with its associated assets and liabilities for a lump-sum consideration. This structure is commonly used for business carve-outs or internal restructurings. It is often preferred from a tax structuring perspective, as slump sales undertaken on a going-concern basis for a lump-sum consideration are exempt from liability under the Central Goods and Services Tax Act, 2017 and slump sale provisions under the Income Tax Act, 1961 (“IT Act”) treat the entire undertaking as a single capital asset, providing greater certainty in the determination of capital gains on the transfer.

M&A in India may involve one or more of the following regulators, based on factors such as transaction size, sector, involvement of foreign capital and listing status of the target:

• Securities and Exchange Board of India (SEBI): regulates acquisitions involving listed companies, including open offer obligations and disclosure requirements under the Takeover Regulations and other securities laws.
• Reserve Bank of India (RBI): oversees foreign investment and cross-border capital flows under the Foreign Exchange Management Act, 1999 (FEMA) and associated regulations, including pricing guidelines and sector-specific investment frameworks.
• Registrar of Companies (RoC) and the Ministry of Corporate Affairs (MCA): administer corporate law compliance, filings and approvals under the Companies Act, 2013, the Limited Liability Partnership Act, 2008 and the Indian Partnership Act, 1932.
• National Company Law Tribunal (NCLT): approves schemes of arrangement, mergers, demergers and insolvency resolution processes under the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016.
• Competition Commission of India (CCI): reviews combinations (mergers, acquisitions and amalgamations) under the Competition Act, 2002 from an antitrust perspective.
• Tax Authorities: the Central Board of Direct Taxes (CBDT) and Income Tax Department administer direct tax implications of transactions under the Income Tax Act, 1961; the Central Board of Indirect Taxes and Customs (CBIC) administers indirect tax matters under the Goods and Services Tax Act, 2017.
• Department for Promotion of Industry and Internal Trade (DPIIT): formulates foreign investment policy and sectoral caps, entry routes and conditions for foreign investment; administers foreign investment approvals in conjunction with the relevant sectoral ministry or department and the RBI.
• Stock exchanges such as the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE): oversee compliance with listing and disclosure obligations.

Transactions in regulated sectors also require interface with/approvals from sector-specific regulators, such as the Insurance Regulatory and Development Authority of India (IRDAI), Telecom Regulatory Authority of India (TRAI) and National Housing Bank (NHB).

In addition, transactions involving entities operating in the Gujarat International Finance Tec City (“GIFT City”) are subject to the oversight of the International Financial Services Centres Authority (IFSCA).

Foreign investment in Indian companies is governed primarily by FEMA and related rules and regulations. The foreign investment framework distinguishes between foreign direct investment (FDI), being strategic and long-term investment in unlisted or listed companies, and foreign portfolio investment (FPI) in listed securities.

The key features of the foreign investment framework are summarised below.

Entry Routes

Foreign investment in Indian companies is permitted via the following routes, based on the sector in which the target operates and the threshold prescribed for foreign ownership:

• Automatic route: Foreign investments in automatic route sectors do not require prior approval and may be undertaken subject to compliance with sectoral caps, pricing guidelines and reporting requirements. Over 90% of FDI falls within the automatic route.
• Government approval route: Investments in government approval route sectors (or above prescribed foreign ownership thresholds in automatic route sectors) require prior approval from the Government of India.

Sector-Specific Conditions and Foreign Ownership Thresholds

India’s foreign investment policy prescribes sector-specific limits on foreign ownership. While many sectors permit up to 100% foreign investment via the automatic route, others impose partial caps or additional conditions – for instance, foreign investment is permitted up to 74% in defence and 49% in private sector banking via the automatic route (with higher thresholds requiring government approval), and sectors such as single-brand or multi-brand retail trading have specific conditions or compliances for receiving foreign investment. Certain sectors are prohibited for foreign investment, including atomic energy, lottery business, gambling and betting, chit funds and real estate.

Pricing Guidelines

Transactions involving foreign investors must comply with prescribed valuation rules. In the case of companies whose shares are not listed, the shares issued or transferred to a non-resident must be priced at or above the fair market value determined by a SEBI-registered merchant banker or chartered accountant and shares acquired from a non-resident must be priced at or below such fair market value. For listed companies, pricing formulas are prescribed under SEBI regulations and linked to the market price of the shares.

Investments Originating From Bordering Jurisdictions

In 2020, India had introduced additional safeguards for primary and secondary investments originating from entities or individuals based in countries sharing a land border with India. All such investments required prior approval from the government, irrespective of the sector involved.

Following the release of Press Note No. 2 of 2026 by the DPIIT on 10 March 2026, this position has been partially relaxed. Investments of up to 10% with a non-controlling beneficial ownership held by citizens or entities of such land-bordering jurisdictions are now exempt from prior government approval, and may be undertaken in compliance with sectoral conditions and reporting requirements. In addition, for investments from such jurisdictions in specified manufacturing sectors (such as electronic capital goods, electronic components and solar cells) where majority ownership and control remain Indian, approvals are to be processed within a defined timeline of 60 days.

Deferment of Consideration

For FDI, payment of deferred consideration is permitted in share transfers between resident sellers and non-resident buyers and vice versa subject to FEMA conditions, whereby up to 25% of the total consideration may be deferred for a period not exceeding 18 months from the date of transfer, provided that the total consideration actually paid is compliant with the prescribed pricing guidelines. The consideration so deferred may be settled through an escrow mechanism and may be subject to adjustments for indemnity payments due from the seller to the buyer. This framework does not apply to FPI, as transactions are executed and settled through stock exchange mechanisms. In the updated Master Direction on Foreign Investment in India issued by the RBI in January 2025, it was clarified that deferred payment arrangements available for FDI are also available to foreign owned and controlled companies.

Merger control in India is governed by the Competition Act, 2002 and the regulations issued by the CCI. Transactions involving acquisitions, mergers or amalgamations (together referred to as “combinations”) that meet prescribed thresholds require prior CCI approval.

Notification Thresholds

A combination requires mandatory prior notification to and approval from the CCI if any of the following thresholds are met:

• Enterprise-level thresholds:
1. Asset/turnover threshold (India nexus): combined assets of parties in India exceed INR2,500 crore or combined turnover in India exceeds INR-7,500 crore; or
2. Asset/turnover threshold (global nexus): combined global assets exceed USD1.25 billion (with India assets of at least INR250 crore) or combined global turnover exceeds USD3.75 billion (with India turnover of at least INR750 crore); or
• Group-level thresholds:
1. Asset/turnover threshold (India nexus): combined assets in India exceed INR10,000 crore or combined turnover in India exceeds INR30,000 crore; or

1. Asset/turnover threshold (global nexus): combined global assets exceed USD5 billion (with India assets of at least INR1,250 crore) or combined global turnover exceeds USD15 billion (with India turnover of at least INR3,750 crore); or
• Deal value threshold (DVT): Introduced by an amendment in 2023, and operative from 10 September 2024, this threshold applies: (i) where the transaction value (including all contingent and deferred amounts) exceeds INR-2,000 crore; and (ii) the target entity has “substantial business operations in India”; assessed on metrics prescribed in the CCI regulations, including users, subscribers, data or revenue from India. This threshold was specifically designed to capture large digital acquisitions below the asset/turnover tests.

De Minimis Exemption Based on Target Assets and Turnover

Transactions are exempt from notification where the target entity or business division has assets of less than INR450 crore or turnover of less than INR1,250 crore in India (in the immediately preceding financial year), even if the parties otherwise meet the asset or turnover thresholds. This exemption is not available where the transaction meets the DVT under the Competition Act, 2002, in which case notification to the CCI is required irrespective of the target entity’s asset or turnover levels.

Labour Code Reforms

India consolidated 29 central (ie, federal) labour statutes into four codes effective from November 2025, which are intended to simplify compliance through uniform definitions, digital filing systems and streamlined regulatory procedures. Implementation remains subject to phased notification of rules by central and state governments. Once operationalised, the new framework is expected to influence employment diligence and workforce structuring in M&A transactions, particularly through changes to wage definitions, prohibition of contract labour in core activities and social security coverage.

Transaction Structure and Employee Treatment

Employee treatment in M&A transactions differs depending on the transaction structure:

• Share acquisitions: The focus is on historical non-compliances, including unpaid statutory dues, misclassification of employees, and legacy disputes, which continue with the target.
• Asset transfers or business transfers: Employees do not automatically transfer to the acquirer, and a consent-based approach is generally taken to the transfer of employees. For employees categorised as “workers”, if employment is not continued on terms no less favourable and without interruption of service, the transferor may be required to pay retrenchment compensation. For non-workers, the transfer is contractual, with the provision of benefits associated with continuity of service being commercially agreed between parties.

Certain labour laws recognise a “successor-in-interest” principle, under which the transferee may be jointly liable for past non-compliances, particularly in relation to provident fund, gratuity and other statutory dues. Additionally, accrued employee benefits, such as gratuity, may need to be transferred, funded, or otherwise addressed contractually between the parties.

India does not have a standalone national security screening statute; instead, national security checks are woven into the FDI framework. The mandatory government approval route for investments from an entity or citizen of a land-bordering nation or an entity in which beneficial ownership is held by a citizen of a land-bordering nation operates as a de facto security screening mechanism (refer to ‘Investments Originating From Bordering Jurisdictions’ in 2.3 Restrictions on Foreign Investments). Additionally, applications for government approval for foreign investments in sensitive sectors, such as space, defence and broadcasting, are automatically routed for clearance by the Ministry of Home Affairs and may be subject to enhanced scrutiny by the relevant administrative ministry.

Judicial Scrutiny of Offshore Investment Structures

In January 2026, the Supreme Court of India in The Authority for Advance Rulings v Tiger Global International II Holdings denied the availability of treaty benefits under the India–Mauritius tax treaty on the basis of India’s anti-avoidance framework, and also observed that the Mauritian investment entities involved in the transaction lacked sufficient commercial substance. The dispute concerned taxation of gains from an offshore transfer where the underlying value was substantially derived from India. The court clarified that the possession of a tax residency certificate does not guarantee treaty protection where the structure lacks genuine commercial substance.

Liberalisation of Foreign Investment in Strategic Sectors

In 2025, India liberalised foreign investment in certain strategic sectors. In the insurance sector, legislative reforms have increased the permissible foreign investment limit to 100%, subject to regulatory oversight by IRDAI. Similarly, in 2024, the Government liberalised the space sector by permitting up to 100% foreign investment, with differentiated entry routes: (i) up to 74% via the automatic route for satellite manufacturing and operations, satellite data products and ground/user segments; (ii) up to 49% via the automatic route for launch vehicles and spaceports; and (iii) up to 100% via the automatic route for manufacturing of components and subsystems for satellites and ground/user segments. These reforms reflect a broader policy direction to attract foreign capital into sectors previously reserved for domestic participation.

Acquisition Financing

In February 2026, the RBI introduced a framework permitting banks to finance acquisitions of equity shares and compulsorily convertible instruments, including limited refinancing as part of the transaction structure. This is an important shift from the earlier regime, where acquisition financing was largely dependent on offshore lenders and private credit, and is expected to expand domestic funding options, improve deal execution and deepen India’s leveraged finance market.

Takeovers of listed companies in India continue to be governed by the Takeover Regulations. Over the past 12 months, there have been no major legislative amendments to the core framework of the regulations, and the fundamental principles governing acquisitions of voting rights and control in listed companies – including the mandatory open offer threshold and minimum offer size – remain unchanged. During this period, SEBI has issued clarifications and operational guidance on procedural aspects of the takeover regime in order to improve transparency and streamline disclosure practices rather than introduce substantive changes to the regulatory structure. (Refer to 4.1 Principal Stakebuilding Strategies.)

Looking ahead, SEBI periodically reviews the takeover framework in light of evolving market practices, and several areas remain the subject of discussion and regulatory attention, including: (a) the concept of “control” under the Takeover Regulations in view of court and tribunal rulings – a subject of sustained judicial and regulatory debate; (b) refinements to pricing methodologies for open offers for infrequently traded shares; (c) alignment of disclosure obligations with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR”); and (d) indirect acquisitions through complex holding structures.

Stakebuilding in listed Indian companies prior to launching an offer is constrained by structural and regulatory factors. Chief among them are the shareholding structures prevalent in listed Indian companies – promoter groups frequently retain substantial holdings and large institutional investors often hold significant stakes. Investors seeking significant stakes typically negotiate with promoters or other significant shareholders rather than accumulating shares gradually through the open market.

In addition, the Takeover Regulations impose disclosure requirements (discussed in 4.2 Material Shareholding Disclosure Threshold) and open offer thresholds which inhibit creeping acquisitions. Under the Takeover Regulations, an acquirer is required to make a mandatory open offer upon: (a) acquiring 25% or more of the voting rights in a listed company; or (b) acquiring control, irrespective of shareholding. The open offer must be made at a price prescribed under the Takeover Regulations to acquire at least a further 26% of the total shares of the target company from public shareholders. Following the initial acquisition and open offer, an acquirer holding 25% or more may acquire up to 5% additional shares in a financial year without triggering a further open offer under the creeping acquisition mechanism.

Stakebuilding Mechanisms

Stakebuilding typically occurs through:

• Open market purchases:carried out on stock exchanges and typically used to acquire initial nominal holdings;
• Block trades: with institutional shareholders, allowing larger parcels of shares to be acquired off-exchange in a single transaction; and
• Negotiated off-market transactions:with promoters or other significant shareholders, which are the most common route to acquiring a controlling or significant minority stake in an Indian listed company.

Stakebuilding strategies must also consider other regulatory constraints, including foreign investment limits applicable to foreign investments (refer to ‘Entry Routes’ in 2.3 Restrictions on Foreign Investments) and sector-specific ownership restrictions (refer to ‘Sector-Specific Conditions and Foreign Ownership Thresholds’ in 2.3 Restrictions on Foreign Investments) under India’s foreign investment policy.

Disclosure obligations relating to shareholdings in listed companies arise primarily under the Takeover Regulations and the SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”), with additional disclosure obligations imposed on listed companies under the SEBI LODR.

Takeover Regulations – Acquirer and Continual Disclosures

Under the Takeover Regulations, any acquirer whose shareholding or voting rights in a listed company reach or exceed 5% must disclose such acquisition to the company and the relevant stock exchanges within two working days of acquisition. Thereafter, any subsequent acquisition or disposal resulting in a change of 2% or more in the acquirer’s shareholding must also be disclosed within the same timeframe. Holders of 25% or more of the shares or voting rights in a listed company – including promoters and promoter group entities – must annually disclose their aggregate shareholding and voting rights as of 31 March to the company and the stock exchanges within seven working days. Promoters and promoter group entities are additionally required to make continual disclosures of their shareholding on an ongoing basis in accordance with the Takeover Regulations.

PIT Regulations – Insider Trading Disclosures

Under the PIT Regulations, promoters, any person in possession of unpublished price-sensitive information and other designated persons are also required to disclose trades in listed company securities where the cumulative value of such trades within a calendar quarter exceeds INR10,00,000. The company is then required to notify the stock exchanges of such disclosures within two trading days.

SEBI LODR – Shareholding Pattern

Under the SEBI LODR, listed companies are required to disclose their shareholding pattern within 21 days from the end of each quarter, detailing shareholding by categories – Indian, foreign, promoter, public and institutional shareholding. In addition, listed entities are required to make annual disclosures, including disclosure of material events and information that may impact shareholding or control.

Reporting thresholds under the Takeover Regulations and SEBI LODR cannot be modified by a company’s constitutional documents. Similarly, listed companies may not introduce transfer restrictions or bespoke reporting thresholds through their articles that differ from or are inconsistent with the regulatory framework – any such provision would be unenforceable to the extent of its inconsistency with applicable securities laws. Several other regulatory and structural factors impact the ability of investors to accumulate significant stakes in Indian listed companies.

Regulatory Hurdles

The principal statutory hurdle is the mandatory open offer trigger on acquiring 25% of voting rights or control under the Takeover Regulations. Once this threshold is crossed, the acquirer must make an open offer to acquire at least a further 26% of the aggregate share capital from public shareholders for a price determined in accordance with the prescribed pricing formulas. Additionally, any further acquisition of more than 5% additional shares in a financial year can trigger another open offer under the creeping acquisition mechanism. This requirement significantly affects the structuring of acquisitions and often necessitates careful planning of stake-building strategies. (Refer to 4.1 Principal Stakebuilding Strategies.)

In addition, the SEBI LODR require listed companies to maintain at least 25% public float, which limits the quantum of shares available for acquisition in the public market and constrains large-scale stake accumulation through open market purchases. Failure to meet this minimum public float requirement within prescribed timelines may result in regulatory action, including compulsory delisting.

Structural Hurdles

Beyond statutory requirements, concentrated promoter ownership is a defining structural feature of the Indian listed company landscape. Promoter groups frequently retain controlling stakes, reducing the available free float and making gradual open market accumulation an impractical route to acquiring meaningful influence. As a result, hostile acquisitions are relatively uncommon in India – most control transactions are negotiated directly with promoters or significant shareholders.

Contractual Transfer Restrictions

Agreements between shareholders of listed companies may contain transfer restrictions. While SEBI does not permit discriminatory transfer restrictions in a listed company’s articles of association – as these would impede the free transferability of listed securities – contractual provisions between shareholders are enforceable, though they cannot bind the company or third parties that are not party to the agreement.

Dealings in equity derivatives such as futures, options and swaps are permitted under the Securities Contracts (Regulation) Act, 1956 and are actively traded on stock exchanges. These instruments allow investors economic exposure to the price movements of listed securities without directly acquiring the underlying shares.

However, derivatives cannot be structured in a manner that confers beneficial ownership, voting rights or control over a listed company while circumventing regulatory obligations. If a derivative structure provides economic exposure equivalent to share ownership or involves rights over the underlying shares, SEBI may treat the arrangement as an acquisition for the purposes of the Takeover Regulations, potentially triggering disclosure requirements or open offer obligations. In addition, SEBI prescribes market-wide and client-level position limits for derivatives, which constrain the extent to which investors can build significant economic exposure through derivative positions. For single-stock derivatives, the market-wide position limit is linked to free-float and liquidity metrics, with a minimum threshold of INR500 crore and no absolute cap. Client-level limits are prescribed as a percentage of open interest and market-wide position limits, varying by participant category.

Derivative transactions that confer economic exposure or rights similar to those associated with ownership of equity shares may trigger disclosure obligations under the Takeover Regulations, in the same manner as those applicable to share acquisitions. Accordingly, such transactions will be subject to the 5% initial disclosure threshold trigger and the 2% incremental disclosure requirement applicable to acquisitions of shares or voting rights.

Under the PIT Regulations, promoters, members of the promoter group and designated persons are also required to disclose trades in derivatives linked to the company’s securities when the aggregate value of such trades exceeds INR10,00,000 in a calendar quarter.

From a competition law perspective, derivative transactions do not generally require disclosure or merger control notification unless they result in the acquisition of control or beneficial ownership of shares that meet the thresholds prescribed under the Competition Act, 2002. (Refer to 2.4 Antitrust Regulations.)

Listed Company Acquisitions

Where an acquisition of shares triggers an open offer – by virtue of an initial acquisition of a 25% stake, subsequent acquisitions of 5% or more in a financial year, or acquisition of control – the acquirer is required to issue a detailed public statement articulating the strategic purpose of the acquisition, intentions regarding corporate control, and granular details regarding post-acquisition business plans and funding sources.

Below the open offer threshold, acquirers are required to disclose acquisition of shares resulting in holdings of 5% or more of the share capital of company and every 2% acquired thereafter – such disclosures are limited to shareholding details and do not require disclosure of intent or control.

Unlisted Company Acquisitions

Conversely, acquisitions of shares in companies whose shares are not listed are largely insulated from these mandatory transparency norms, relying instead on contractual disclosures negotiated by the target.

Disclosure obligations of targets in respect of M&A transactions in India depend primarily on whether the target entity is listed or unlisted, as well as the regulatory approvals required for the transaction.

Listed Companies

For listed companies, disclosure obligations are governed by the SEBI LODR. Listed entities must disclose material events relating to acquisitions, disposals, agreements or other arrangements that affect the management, control or obligations of the company. Fundraising transactions undertaken by listed companies are also subject to prescribed disclosure requirements and timelines. As a general principle, the disclosure of an M&A transaction by a listed company is triggered upon the approval of the transaction by the board of directors and must be made within 30 minutes of the board meeting. A listed entity must also disclose material events or information as soon as reasonably possible, including where confidential information relating to a transaction has been leaked or where there are unusual price movements that may indicate the existence of undisclosed material information.

Unlisted Companies

Unlisted targets have no obligation to publicly disclose negotiations or completed acquisitions, though certain information – such as revisions to share capital, director appointments and changes in shareholding pattern – is publicly available through corporate filings. The articles of association of every company are publicly available – these are typically updated upon deal completion to include governance provisions but not commercial terms.

Regulatory Filings

• Filing obligations and triggers: In acquisitions requiring CCI approval, the acquirer (or parties, in the case of mergers/amalgamations) must notify the CCI upon execution of binding documents – interpreted broadly to include documents evidencing an intention to acquire control – and prior to transaction completion. Notifications filed with the CCI entail disclosure of substantial transaction-related information – including party details, transaction structure, shareholding, governance rights – and business-related particulars – including an assessment of relevant market(s), the prevailing competitive landscape, and the underlying commercial rationale for the transaction. Some of this information, particularly material details of the transaction, are typically reproduced in the CCI’s approval orders, which are publicly available. Parties may request confidentiality for commercially sensitive information, but must submit a non-confidential version of the filing with appropriate redactions and commercial justifications for such redactions along with a supporting affidavit cum undertaking specifying the date on which the confidential treatment is to expire. Typically, the CCI reviews such requests and grants confidentiality for a limited period.
• NCLT filings: In transactions implemented through NCLT-approved schemes of arrangement – typically mergers, demergers and restructurings – copies of scheme documents and related filings also enter the public domain when applications are filed before the NCLT. The final orders of the NCLT generally capture key elements of the transaction, including the structure of the scheme, share exchange ratio, treatment of assets and liabilities, accounting treatment, and observations on regulatory and stakeholder approvals.

Market participants typically maintain strict confidentiality during the early stages of negotiations, and non-disclosure agreements are commonly used to protect commercially sensitive information while parties conduct preliminary discussions and due diligence. In transactions involving listed companies, the disclosure obligations are linked to the occurrence of a material event, typically board approval of the transaction. Under the SEBI LODR, disclosures are required to be made as soon as reasonably possible and within the prescribed timeline of 30 minutes of the conclusion of the board meeting.

In practice, stock exchange filings, press releases and investor communications are prepared in advance, often in parallel with final negotiations, to ensure that disclosures can be made immediately upon board approval without risking a breach of the prescribed timelines, while preserving confidentiality until disclosure.

For unlisted companies, public announcements are generally synchronised with the execution of binding transaction documents or deal completion.

Due diligence in Indian M&A transactions typically covers legal, financial, tax and operational aspects of the target business, with the scope determined by transaction type and the scale of the target’s business. Legal due diligence exercises commonly examine corporate governance documents, material commercial contracts, licences, intellectual property rights, employment arrangements, statutory compliance and ongoing litigation.

In addition to these general areas of review, legal diligences will also include certain India-specific elements, depending on the nature of the transaction – these include:

• in transactions involving foreign capital, analysing the target’s business to determine its sectoral classification under FEMA and related caps and conditions for foreign investment;
• identification of regulatory approvals required for the transaction – which may include approvals from the CCI, the RBI, SEBI or sectoral regulators such as TRAI, IRDAI and NHB;
• in transactions involving promoter-controlled businesses – which represent a significant proportion of Indian M&A activity – a detailed review of related party transactions, intra-group arrangements and the terms of shared services;
• title diligence on immovable property, which is a particularly important and often complex area in Indian transactions, given the fragmented nature of land records across states and the prevalence of title disputes; and
• diligence of both historical compliance under predecessor statutes as well as compliance readiness for the revisions to the regulatory framework, as necessitated by recent legislation such as the Labour Codes and the Digital Personal Data Protection Act, 2023 and accompanying Rules.

Standstill covenants and exclusivity provisions are both commonly included in transaction documentation in Indian M&A deals, particularly in negotiated transactions involving private companies.

Exclusivity arrangements are typically included in preliminary documents such as term sheets or letters of intent. These provisions restrict the target and seller from engaging with competing bidders for a specified period while the preferred acquirer conducts due diligence and negotiates definitive agreements. Exclusivity periods in Indian M&A transactions typically range from 45 to 120 days depending on transaction complexity. In competitive auction processes, however, sellers may decline exclusivity until later stages of the transaction and may continue discussions with multiple potential acquirers until definitive agreements are executed. Break-up fees are uncommon and, where included, are difficult to enforce unless actual damages are quantifiable.

In the context of negotiated M&A transactions, standstill obligations – sometimes referred to as interim covenants or conduct of business obligations – are typically incorporated into the definitive transaction agreements and govern the operation of the target between deal signing and completion of the transaction. Typical restrictions include limitations on issuing new securities, restructuring share capital, incurring material indebtedness, disposing of key assets or materially altering the nature of the business.

Definitive transaction agreements in Indian M&A transactions typically include share purchase agreements (SPAs), share subscription agreements (SSAs), business transfer agreements (BTAs) and shareholders’ agreements (SHAs). In acquisitions involving listed companies, the commercial terms agreed between the acquirer and significant shareholders are typically documented in definitive agreements such as SPAs, which is the trigger for open offer where thresholds under the Takeover Regulations are met. The open offer itself is governed by a separate statutory disclosure framework, including the public announcement, Detailed Public Statement (DPS) and letter of offer filed with SEBI and the stock exchanges, which set out the terms and conditions of the tender offer to public shareholders.

In unlisted company acquisitions, the SPA is the principal document. Where the acquirer is also subscribing to newly issued shares, an SSA is executed alongside the SPA. Transactions involving the transfer of a business undertaking are typically documented through a BTA or slump sale agreement. Multi-entity reorganisations and mergers are usually implemented through schemes of amalgamation or arrangement approved by the NCLT. Where existing investors/shareholders continue to hold stakes alongside an incoming investor, an SHA is commonly executed to regulate governance rights, transfer restrictions and exit mechanisms.

Unlisted company acquisitions can generally be completed relatively quickly once due diligence and transaction documentation are finalised, particularly where the target operates in an unregulated sector and no specific regulatory approvals are required. In contrast, acquisitions involving listed companies typically take longer because crossing the prescribed shareholding threshold of 25% triggers a mandatory open offer to public shareholders under the Takeover Regulations. The open offer process usually takes three to four months, and completion of the underlying acquisition generally occurs after the open offer process has concluded.

Timelines may also be affected where the target operates in regulated sectors, such as banking or non-banking financial services, where approvals from sectoral regulators (for example, the RBI) may be required before the transaction can be completed. In addition, transactions meeting the relevant thresholds under competition law must obtain clearance from the CCI, which may further extend the timeline. (Refer to 2.4 Antitrust Regulations.)

Acquisitions involving listed companies are subject to the mandatory open offer framework under the Takeover Regulations. An acquisition resulting in the acquirer holding 25% or more of the voting rights in a listed company triggers a mandatory open offer to acquire at least a further 26% of the aggregate share capital from public shareholders. In addition, acquisitions that result in a change of control may trigger an open offer requirement even where the shareholding threshold is not crossed. (Refer to 4.1 Principal Stakebuilding Strategies.)

While cash consideration is most prevalent, consideration may also be structured in non-cash forms, including security swaps, transfers of assets including physical assets, receivables and intellectual property, or a combination of cash and non-cash components. The non-cash components are subject to statutory valuation requirements.

In transactions involving unlisted companies, parties frequently use mechanisms such as deferred consideration and earn-outs to bridge valuation gaps and align payouts with future performance. Valuation differences are also addressed through adjustment mechanisms, most commonly working capital adjustments or locked-box structures, particularly in sectors where earnings visibility or asset valuation may be uncertain.

Warranty and indemnity (W&I) insurance is also gaining traction in the Indian M&A market as a tool for risk allocation and to enable cleaner exits for sellers without extended liability or reliance on escrows. Improved diligence standards and disclosure practices have also enabled insurers to offer broader coverage, more flexible terms and competitive pricing, making W&I insurance increasingly accessible, including in mid-market transactions.

Under the Takeover Regulations, open offers may have limited conditionalities. While regulatory approvals (eg, CCI clearance, sector-specific licences) and third-party lender consents are standard conditions precedent for open offer transactions, acquirers may not include other subjective or discretionary conditions. The withdrawal of an open offer is permitted only in limited circumstances, such as where a required statutory approval is refused or a disclosed condition beyond the acquirer’s control is not satisfied.

An acquirer may structure an open offer to be conditional upon achieving a specified minimum level of acceptance from public shareholders. This is typically considered where the acquirer seeks to reach the holding thresholds that confer additional shareholder rights under the Companies Act, 2013.

For instance, a shareholding of over 50% enables the acquirer to pass ordinary resolutions (such as appointment of a director or issuance of bonus shares) and exercise control over day-to-day operations. A shareholding in excess of 75% allows the acquirer to pass special resolutions, which are required for key decisions such as amendments to constitutional documents, capital restructuring and certain corporate actions. A 90% or above shareholding enables the acquirer to undertake minority squeeze-out mechanisms and achieve near-complete ownership.

Accordingly, minimum acceptance conditions are often linked to these thresholds, depending on the acquirer’s strategic objective. Where the offer is conditional, the terms of the underlying transaction must provide that if the minimum acceptance level is not achieved, the acquirer will not acquire any shares under the open offer and the triggering transaction will not proceed. In such cases, the offer effectively lapses due to non-fulfilment of the stated condition, rather than being withdrawn.

In India, a public takeover cannot be made conditional upon the bidder obtaining financing. Prior to issuing a public announcement, SEBI mandates that the acquirer establish firm financial arrangements and deposit a prescribed sum into an escrow account (via cash or bank guarantee) to unconditionally prove its ability to fulfil the payment obligations of the open offer.

Recent regulatory developments have begun to expand the role of acquisition financing in the Indian M&A market. In February 2026, the RBI introduced a framework permitting commercial banks to provide credit facilities to fund acquisitions of equity shares or compulsorily convertible debentures of target companies. The framework also permits refinancing of existing acquisition debt and, in certain cases, refinancing of the target’s outstanding borrowings where such refinancing forms part of the acquisition structure. This represents a significant shift from the earlier regulatory position under which acquisition financing by domestic banks was limited, resulting in many leveraged transactions relying on offshore lenders or credit funds.

For M&A transactions involving unlisted targets, financing conditions are permissible and routinely included in SPAs, particularly where the acquisition involves leveraged finance or where the acquirer’s funding source is dependent on a parallel process.

Bidders routinely secure interim operating covenants, non-solicitation clauses and strict exclusivity periods to protect the transaction. Break-up fees are rarely utilised and difficult to enforce; Indian courts routinely classify them as unenforceable penalty clauses unless actual damages are proven. Recent regulatory changes, particularly the CCI’s shortened 150-day maximum review period, have positively impacted interim timelines by accelerating clearance predictability.

If seeking less than 100% ownership, acquirers negotiate minority protection and governance rights through shareholders’ agreements. These universally include board nomination rights, veto rights on reserved matters and rights to nominate key managerial personnel, approval of business plans and extensive information covenants. For listed targets, the SEBI LODR rules require any special governance rights to be approved by a special resolution of the shareholders prior to their exercise and at five-year intervals thereafter.

Voting by proxy is statutorily permitted under the Companies Act, 2013. Shareholders can appoint a proxy to attend general meetings and cast votes in a poll but are prohibited from speaking at the meeting or voting by a show of hands.

Once an acquirer secures 90% or more of the equity share capital, the Companies Act, 2013 provides a direct squeeze-out mechanism, allowing the acquirer to notify and compel the minority to sell their remaining shares at a fair value determined by a registered valuer. Alternatively, companies may execute a minority squeeze-out via a selective capital reduction scheme, which requires approval from 75% of voting securities and final sanction by the NCLT.

Securing irrevocable commitments from principal shareholders to tender shares is a standard practice in unlisted bilateral negotiations. However, for listed companies, negotiating hard voting commitments prior to an open offer may result in SEBI classifying the principal shareholders as “Persons Acting in Concert” with the acquirer, thereby exposing them to joint and several liability under the Takeover Regulations. Once binding agreements are executed, such commitments typically do not allow termination if a higher competing offer emerges.

For listed targets, the bid becomes public upon the acquirer executing a binding agreement or breaching the 25% ownership threshold. This requires an immediate public announcement on the stock exchanges, followed by a DPS, published in national newspapers outlining the commercial parameters of the offer. Acquisition of a stake in an unlisted target is not subject to public bids.

When issuing shares as consideration, the issuer must make baseline disclosures such as the objects of the issuance, the extent of promoter participation and the identity of allottees/investors.

In addition to these general disclosures, transaction-specific disclosures are also required to be made in the offer documents and stock exchange filings. These typically include: (a) details of the underlying transaction (including structure and consideration mechanics); (b) the commercial rationale for the share issuance; (c) the basis of valuation and pricing of the shares (including any valuation reports); and (d) the resulting dilution impact on existing shareholders (including changes in shareholding pattern and control, if any).

Acquirers launching an open offer for a listed target must include comprehensive, audited financial statements in their DPS and letter of offer. This encompasses balance sheets, profit and loss accounts, total revenue and net profit. These statements must be prepared and disclosed in accordance with the accounting standards (eg, Indian GAAP or IFRS) applicable in the bidder’s home jurisdiction.

While unlisted transaction documents remain entirely confidential, the transparency requirements for listed takeovers are substantially higher. The underlying definitive agreements (eg, the share purchase agreement) that triggered the open offer must be physically disclosed and made available for public inspection by the target’s shareholders during the entire offer period.

Under the Companies Act, 2013, directors, in the context of a business combination, are required to act in good faith, exercise independent judgement and act in the interest of all stakeholders, and not only shareholders. In transactions involving listed companies, directors are also required to ensure that the terms of the transaction are evaluated objectively. In the context of a takeover, this includes constituting a committee of independent directors to assess the offer and provide a reasoned recommendation to public shareholders.

Forming ad hoc committees to streamline due diligence and mitigate conflicts is a standard practice in unlisted M&A. In public takeovers, the Takeover Regulations mandate the target’s board to constitute a Committee of Independent Directors (CID). The CID is tasked with providing unbiased written recommendations regarding the fairness of the open offer to assist public shareholders.

While India lacks a codified “business judgement rule”, Indian courts and tribunals apply an equivalent judicial doctrine. Courts consistently defer to the commercial wisdom and judgement of the board in M&A situations, fundamentally refusing to interfere provided that it can be established that the directors acted reasonably, with due care, absent of fraud, and in the bona fide interests of the company.

Seeking independent outside advice is both a best practice and, frequently, a statutory requirement. The CID in a public takeover is explicitly authorised and expected to engage external financial and legal advisers to formulate their public recommendations. Furthermore, for court-approved restructuring schemes and open offer pricing calculations, regulations require independent fairness opinions from SEBI-registered merchant bankers.

Conflicts of interest are subjected to severe statutory scrutiny by SEBI and the MCA. Directors possessing any direct or indirect pecuniary interest in an M&A transaction must fully disclose the nature of their interest immediately and are prohibited from participating in board deliberations or voting on the matter. Failure to abstain invalidates the decision and attracts severe penal consequences.

Hostile tender offers are legally permissible but exceptionally rare in India. The corporate landscape is heavily characterised by family-owned conglomerates with tightly concentrated promoter shareholdings, which present significant structural and voting barriers to hostile acquisitions.

SEBI strictly regulates and limits a target board’s capacity to deploy defensive “poison pill” measures. Once a public offer is initiated, the target’s board is subject to the “frustrating action” rule; they must operate strictly within the ordinary course of business. During the pendency of an open offer, targets are prohibited from alienating material assets, issuing new securities, or incurring debt outside the ordinary course, unless such actions have the prior approval from shareholders via a special resolution.

Given the regulatory constraints on structural defences, the most viable and commonly deployed defensive measure is the “white knight” strategy, where the target board actively procures a friendly third-party investor to launch a superior counter-offer or acquire a blocking stake. Pre-emptive consolidation of promoter shareholding via “creeping acquisitions” is also a widely used baseline defence.

When confronting a hostile bid, directors are bound by their overarching fiduciary duties of care and skill to all stakeholders. Their primary regulatory mandate is to refrain from frustrating the bid independently and instead ensure that the CID evaluates the hostile offer with objectivity, subsequently providing a transparent, reasoned recommendation that allows shareholders to make an informed choice.

Directors are prohibited from unilaterally rejecting and blocking a legally compliant takeover offer. The regulatory framework strips the board of the power to arbitrarily reject an acquirer; they must treat hostile bids symmetrically with friendly offers regarding basic information access. The ultimate decision to tender shares rests entirely and exclusively with the shareholders.

In recent years, there has been an increase in M&A-linked disputes, particularly in relation to earn-out calculations, indemnity claims and, in certain cases, minority shareholder allegations of oppression or mismanagement. Having said that, litigation arising from M&A transactions in India remains uncommon as compared with other M&A markets. Where disputes do arise, they are typically resolved through negotiated settlements or arbitration rather than through court processes.

The majority of M&A disputes arise as post-closing disputes after a deal has completed, typically centring on the interpretation of deal agreements. Common post-closing disputes include claims relating to fraud or failure to disclose material information, breaches of representations and warranties, shareholder disputes and valuation disagreements. Indemnity claims have also found success where watertight indemnity provisions have provided effective protection to the non-defaulting party.

Pre-closing disputes do arise, though less frequently. These include no-deal claims, where a party seeks to terminate a transaction and recover termination fees for breach, as seen in the Sony-Zee Entertainment dispute and intervention by non-transacting parties seeking to enforce contractual rights under existing shareholder agreements, as demonstrated in the Amazon–Future Group matter, where an emergency arbitration injunction was upheld by the Supreme Court of India.

Post-pandemic disputes established that Indian courts impose a high burden of proof for termination based on material adverse effect (MAE)/material adverse change (MAC). Furthermore, courts exhibit a reluctance to enforce contractual break-up fees, consistently categorising them as unenforceable penalties unless the claiming party can explicitly quantify corresponding actual damages.

Shareholder activism in India is becoming increasingly visible, driven largely by domestic institutional investors, mutual funds and influential proxy advisory firms. Despite this growing activism, many Indian listed companies are still controlled by promoter groups. As a result, activist investors rarely attempt to replace management or take control of the board. Instead, shareholder interventions in India typically focus on strengthening governance standards, improving transparency and closely reviewing transactions involving potential conflicts of interest, including related-party arrangements.

Shareholder activism in India, while growing, remains considerably less frequent and effective than in Western jurisdictions. Unlike Western activists, who routinely agitate for major M&A transactions or forced divestitures, Indian activism tends to be more targeted and reactive, focusing on governance and minority protection concerns rather than driving corporate transactions.

Where activism has occurred, it has primarily involved challenging related-party transactions perceived as prejudicial to minority shareholders, questioning executive compensation and demanding stronger ESG frameworks. For example, in July 2025, Zee Entertainment’s proposal to issue preferential warrants worth INR22.37 billion to entities linked to the promoter family was rejected after securing only 59.5% shareholder approval, falling short of the required 75% threshold, following opposition from institutional investors and proxy advisory firms citing dilution concerns. This illustrates the nature of Indian activism – directed at structural fairness and minority protection rather than at driving or blocking M&A transactions.

In India, shareholder intervention in transactions is most often driven by concerns around valuation, especially in preferential allotments, capital raises and restructurings. Recent examples include the rejection of Zee Entertainment’s preferential issue due to pricing and dilution concerns, and scrutiny of Vedanta Limited’s demerger over how value was allocated. These concerns are usually addressed through shareholder voting and proxy adviser recommendations, rather than attempts to block transactions outright.

Note: The data in this article is derived from publicly available sources. The views expressed herein are those of the authors and are not intended to constitute advice or reflect the views of the firm.