India’s first ever class action suit

Hello,

This week, a fire sale of a sought-after fund raised alarm over an Asia-wide PE slump – stress that may affect deal pricing and exits.

Meanwhile, it is rumoured RBI may be looking into a rejig of asset reconstruction in FY26 which could directly impact distressed deals. This, while others predict fewer deals and bigger bets as ticket sizes and buyer behaviour level up.

And finally, India’s first-ever ‘class action suit’ materialised, reported CapTable, which questions shareholder rights and may mean governance risk comes higher on investor checklists in the future.

I hope you enjoy this week’s roundup — please connect on LinkedIn to discuss your next M&A deal.

Let’s dive in.

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Market Trends

The ratings game – why care?

S&P Global’s recent reports are unequivocal about India’s momentum: the economy is on track for robust 6.5% growth. The subsequent credit upgrade from Japan’s R&I only reinforced this.

But the other big ratings agencies Moody’s and Fitch take a different view. They rate India at Baa3 and BBB-, the lowest investment grades, citing fiscal vulnerabilities and structural constraints. They believe public debt above 80% of GDP (FY24) and interest payments consuming a quarter of government revenues are both downers. 

The curious case of banking and governance 

While non-performing assets (NPA) may be falling, Fitch points to risks from credit concentration and under-capitalised public banks that may need government bailouts. 

Further, dealmakers have long griped about lack of contract enforcement, regulatory unpredictability, infrastructure bottlenecks, and uneven regulation across states – India’s different and diverse geographic regions. 

Yet, both agencies maintain a stable outlook, expecting fiscal consolidation and reform.

The S&P/CRISIL take 

The agencies say India’s momentum is real and FY24-25 indicates growth will outpace its emerging market peers. 

For M&A, this signals a strong domestic demand cushion for buyers in consumer, healthcare, logistics, and financial services. 

Exports and fixed investment will continue to lead. For dealmakers this means two things: cross-border investors will chase export-linked manufacturing and supply chain plays, while capex-led activity in construction tech, energy transition, and industrial services creates space for private credit.

Back in 2023 (see chart below), CRISIL /S&P Global projected services to remain India’s growth engine into 2031 – but we all know a lot changed post-Trump, and matters remain mercurial. 

And Jefferies places infra over IT

India’s growth engine for three decades was IT – delivering steady service exports, high margins, and jobs. Jefferies argues India must now switch its focus to infrastructure (roads, ports, railways, power, renewables, logistics, and data centres). 

Already, the government  is pushing high-value, on-shore manufacturing such as of electronics, semicon, batteries, EV components, pharma – not literally infrastructure, but these will need reliable power, efficient ports and last-mile logistics to thrive. 

Domestic conglomerates like Adani, Reliance, Tata, and L&T know this and are looking to shape the remix needed in the coming era as adverse tariffs come into force.

Now the bet is, India can cash-in on the China+1 trend. 

Ports on two coasts, expanding container capacity, and the Dedicated Freight Corridor all strengthen India’s prospects. The question: can it become a credible alternative to China?

India’s IT won’t vanish. It may pivot to powering logistics platforms, infra analytics, and smart networks, ensuring the sector remains ‘too big to fail’ as it contributes nearly more than 7% to India’s total GDP.

Why this matters for deals

Deal flow will be shaped by two cross-currents: a rotation toward infrastructure and manufacturing that demands patient capital, and persistent external risks (tariffs, trade slowdowns, geopolitical uncertainty) that will weigh on exits and valuations.

Japan’s upgrade fits here too: R&I’s decision consolidates S&P’s optimism and suggests more supply of infra and energy transition assets, more distressed opportunities, and more complex cross-border deal structures.