India looks like the best house in a shaky neighbourhood

Hello,

This week, NTPC and Mahagenco signed an agreement to acquire STPL (Sinnar Thermal Power Ltd) for a believed ₹38,000 crore, a marquee public-sector transaction of scale signalling confidence in large-ticket strategic acquisitions using state-owned firms’ balance sheets for infrastructure and energy M&A.

Meanwhile, a source-led exclusive revealed Bain might delay its part-acquisition of gold lender Manappuram Finance because of rules introduced by Sebi on private ownership/control of banking/NBFC assets.

Also, a Supreme Court tax ruling this week on merger share-swaps may affect deal structuring, valuation, and choice between cash vs. share consideration.

And finally, Prudential Financial is said to be thinking of selling its India asset manager, pointing to global financial firms reassessing their exposure to the subcontinent.

I hope you enjoy this week’s roundup – please connect on LinkedIn to discuss how Ideals VDR can help with your next M&A deal.

Let’s dive in.

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Market Trends

India in 2026 looks like the best house in a shaky neighbourhood

It feels fair to start with a cricket metaphor given how much of it is about these past and coming weeks: the Indian markets are having a good innings fought on decent fundamentals. But how will the country fare as geopolitics and economics become ever more challenging? 

A solid innings, but with macro risks

Let’s begin with the caveats in this macro picture: Starting with the greenback.

The world’s most favoured reserve currency (USD) remains overvalued versus its track record, says Julius Baer, and remains relatively strong. A strong dollar will reshape crossborder deals and the implications for India are clear: imports will be expensive; dollar debt will remain elevated; and margins in capex-intense businesses will be under pressure.

For dollar-based buyers (whether SWFs, US strategics, or PE), a stronger dollar implies greater purchasing power in local currency priced assets (including India) and therefore a tactical advantage when bidding for emerging market (EM) targets. But the flipside is that a persistently strong dollar can also weigh on EM earnings via weaker global demand and higher import costs, increasing currency risk for domestic sellers. 

As a result, any cross-border deals must therefore scrutinise currency hedging, with sensitivity testing across export volumes and input price scenarios.

From expansion to consolidation: Exits and breakups

Against this backdrop, dealmaking is beginning to shift, and a gander at the week’s news suggests the dominant M&A signal in India is a consolidation plus unwind phase, marked by large strategic exits, and JV breakups – with more to come.

For instance: papers reported that Allianz completed its divestment from India’s Bajaj Finserv in a ₹21,390-crore ($4.6 billion) buyout; Prudential Financial is reportedly mulling a sale of its India asset manager; And chemicals firm SABIC is overhauling its portfolio. 

Regulation no longer just background noise 

Dealmakers will want to hedge against regulatory mood swings at the RBI, CCI and tax authorities, as these increasingly influence valuation, and even transaction viability.

Energy and renewables will see consolidation, with fewer buyouts, and more minority and structured asset-level deals backed by sovereign funds and infrastructure capital.

But consumption will slow, QSRs will consolidate; Fintechs will seek cost synergies, tech rationalisation, and IPO readiness over expansion.

Special situations will re-emerge if acquisition financing tightens. Stressed balance sheets and IBC-driven asset sales will create opportunities for PEs willing to underwrite complexity and long-winded resolutions. 

BUT that’s it for the caveats

Happily, two reports from S&P Global and one by Julius Baer bear better tidings, and the graphs below aim to show it.

To begin with, Baer’s earnings per share (EPS) chart showed projected growth in EMs (and China) comfortably outpacing developed markets across 2025–27.

Baer suggested India will see acquisitions in profitable, especially export-oriented, manufacturing.

Financial services and larger consumer franchises which are (relatively) defensible will also remain attractive targets.

India’s export surprise in a shrinking global trade pie

An S&P Global analysis singled India out as one of the two large economies consistently recording growth in goods export orders at 2025’s end, even if overall growth moderated each consecutive month last year. 

It seems likely India’s manufacturers are finding demand where many developed markets – and several EMs peers – are flailing, gaining share in a shrinking global exports pie. 

This will strengthen M&A for India’s industrials, engineering, chemicals, and niche capital goods platforms that can scale exports. 

Serious capital is going long 

Next, an S&P Global note on sovereign wealth funds (SWFs, below) shows a near doubling in private market transaction value in 2025, with a clear thematic tilt toward TMT, large buyouts, and PE co-investment. 

SWF interest may raise the floor on pricing for high-quality platforms, increase availability of long-dated capital for large platform deals, and make co-investment structures the default for very large transactions. 

For India, S&P explicitly flags that newer allocators will ‘selectively engage in direct deals…particularly in India and Japan,’ picking out India’s attractiveness. 

Another highlight of the report is that large global pension funds are pivoting to energy and utilities. 

To conclude…

Taken together, the data suggest India enters 2026 not without risks but as a market where capital, consolidation and conviction seem in healthy alignment.