India’s M&A Activity Soars as Regulatory Reforms Inspire Investor Confidence, Insights from Zia Mody, ET LegalWorld

India’s recent regulatory reforms, including the decriminalization of provisions under the Companies Act and liberalization of key sectors, have significantly boosted investor confidence, leading to robust M&A activity, says Zia Mody, Founder and Managing Partner at AZB & Partners.

In an exclusive conversation with ETlegalworld, Mody highlighted that easing penal provisions has removed the fear of criminal liability for minor infractions, making the business environment more welcoming. “Today, very few sectors require prior government approval,” she noted, adding that stable exchange rates, controlled inflation, and collaborative regulators like SEBI and RBI have further enhanced investor sentiment.

Foreign investment is on the rise, particularly from global funds that previously focused on China. Venture capital and AI-focused investments are increasing, while IPO activity remains healthy despite market fluctuations.

The M&A landscape is seeing a shift as private equity firms move from minority stakes toward controlling interests, driven by promoters’ openness to professionalization and resolution of family disputes. Key sectors leading this momentum include renewable energy, healthcare, financial services, data centers, hospitality, and real estate.

Mody also pointed out the growing role of global capability centers in India, attracting investments from East Asian countries, which are actively seeking entry into Indian markets.

Despite a tougher regulatory environment—with the Competition Commission of India (CCI) introducing stricter scrutiny on deals over ₹2,000 crore—Mody sees the CCI as pragmatic and increasingly efficient, clearing combinations faster and encouraging pre-filing discussions.

Looking ahead, Mody remains optimistic about India’s position in global investment flows, emphasizing that consistent reforms and clarity will keep India on investors’ radar.

• Published On May 26, 2025 at 04:45 PM IST

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