Sun Pharma, Coforge, Tata Motors lead a 34% surge in outbound M&A. Grant Thornton data shows $18bn in 2025 deals as companies hedge against rupee depreciation and weak private investment.
Alpha Score of 43 reflects weak overall profile with moderate momentum, weak value, weak quality. Based on 3 of 4 signals — score is capped at 90 until remaining data ingests.
Sun Pharmaceuticals agreed to pay $11.75bn in cash for New York-listed Organon & Co. in late April, the largest overseas acquisition by an Indian company in nearly two decades. The deal is part of a broader wave: IT firm Coforge spent $2.35bn on Silicon Valley AI company Encora. Tata Motors paid $4.4bn for Turin-based vehicle maker Iveco. The Bajaj Group took a 23% stake in global insurer Allianz SE earlier in 2025.
Consultancy Grant Thornton tracked 162 Indian companies spending more than $18bn on outbound acquisitions in 2025, a 34% increase from the previous year. “We could cross $15bn in deal value in just the first half of this year,” Sumeet Abrol, partner and national leader at Grant Thornton, told the BBC.
The headline numbers mask a structural shift. During the previous Indian buying spree two decades ago – when Tata Group bought Jaguar Land Rover and Corus Steel – the motivation was global ambition. Today, analysts say the drivers are more operational. Companies are after technology, R&D expertise, and supply-chain resilience in a world where tariffs are being weaponised.
Neha Singh, co-founder of data firm Tracxn, said Indian companies are “increasingly looking overseas to access markets, brands, technology capabilities, R&D expertise, and established distribution networks that may otherwise take years to build organically.” Stronger balance sheets and improved access to global financing support the trend.
India’s government has repeatedly urged companies to invest more at home. The response has been tepid. Chief Economic Advisor V Anantha Nageswaran recently noted that corporate profits for the top 500 companies grew 30.8% per annum after COVID. “Still, our overall capital formation rates from the private sector have been disappointing,” he said at a policy conference.
The broader economic backdrop has changed sharply since the 2000s. During the first acquisition boom, India was in a roaring bull market. Today, the country faces a rapid exodus of foreign portfolio investors, a sharp slowdown in net foreign direct investment (FDI), and stubbornly weak private sector investment despite tax cuts and production-linked subsidies.
Mukherjea said dozens of smaller Indian companies are making similar greenfield investments or pursuing smaller acquisitions abroad. The capital that could fuel domestic expansion is instead flowing overseas.
Indian companies are also hedging against long-term rupee depreciation. Mukherjea pointed out that the rupee loses about 40% of its value to the dollar every decade. Many next-generation corporate scions live and study abroad and prefer to hold assets in foreign currency.
Even a deal as large as Sun Pharma’s was entirely cash-based. That means the buyer took on full dollar exposure without the equity cushion a share-exchange could offer. Large cash outflows also pressure the rupee further, making the next wave of acquisitions more expensive.
Risk to watch: All-cash deals leave Indian firms exposed to currency swings. If the rupee weakens faster than expected, the effective cost of servicing or integrating those assets rises. The trend also drains dollar reserves from the Indian banking system.
The outbound M&A wave touches multiple sectors. Each deal has a specific rationale:
Smaller companies are also active. Mukherjea noted that “dozens” of firms are making greenfield investments in the US and elsewhere, drawn by lower industrial land costs and easier working capital access.
The capital outflow has implications for Indian financial markets. Foreign portfolio investors have already been exiting Indian equities. Net FDI is slowing. If more large outbound deals are announced, the rupee could face additional depreciation pressure, which in turn makes imports more expensive and fuels inflation.
What would worsen the risk: A prolonged “geopolitical air pocket,” as Grant Thornton’s Abrol described it, could slow the deal flow but also deepen domestic stagnation. If trade tariffs escalate or the global economy slows, Indian firms may rely even more on foreign assets for growth. That would drain rupee liquidity and pressure the currency further.
What would reduce the risk: A revival of domestic demand – triggered by stronger consumption, policy incentives that actually lift private capex, or successful free trade deals with the UK, Europe, and Australia – could reverse the capital flight. Singh expects “selective caution” on large domestic investments but notes that free trade deals could hasten a “deluge of outbound deals” as companies build export bases.
Mukherjea said a spree of free trade deals between India and the UK, Europe, Australia, and other countries could accelerate the trend and lead to a “deluge of outbound deals from India as companies head off to invest in the West to build up bases in the years to come.”
Whether India surpasses last year’s $18bn figure remains uncertain because of the current geopolitical environment, Abrol said. The long-term trend, however, is directionally clear: Indian companies will continue to hedge against domestic uncertainty by buying assets abroad.
For traders, the immediate signal is simple. Track the pace of outbound M&A announcements. A slowdown will imply geopolitical caution. Acceleration will confirm that capital is leaving Indian shores faster than it arrives. That trend is unlikely to reverse without a structural shift in the domestic business environment.
If you are building a watchlist of Indian stocks or ADRs, consider which companies are investing abroad versus those spending at home. The ones hoarding foreign assets may outperform in a weak rupee scenario but carry integration risk. The ones investing in India are betting on a recovery that has yet to materialise. Either way, the data from Grant Thornton and the comments from Marcellus and Tracxn suggest this is not a short-term tactical flow. It is a multi-year portfolio rebalancing by Asia’s third-largest economy.
For broader market context, see our stock market analysis. If you are considering trading Indian ADRs, review the best brokers for international exposure at best stock brokers.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.