For companies seeking to accelerate growth, diversify their portfolios, and enhance their competitiveness in an increasingly dynamic market, Indian acquisitions have become a powerful tool. As evidenced by international giants like Amazon moving into the financial services sector and domestic leaders, these acquisitions reflect both strategic intent and market opportunity. Similar to SIS developing into security solutions. They concurrently provide companies with access to new markets, client bases, and technologies, as well as opportunities for industry consolidation. Acquisitions will continue to reshape India’s corporate landscape and spur its long-term economic transformation as regulatory processes evolve and international investment flows increase.
What is Meant by the Acquisition of a Company?
Corporate plans known as mergers and acquisitions include the acquisition of most or all of another firm’s shares or assets for control by one company. The acquired company is folded into the activities of the buyer or retains its original name; the purchasing company becomes the new owner. Businesses start acquisitions to grow their market presence, boost their profitability, get access to new technologies, reduce rivalry, or improve their operational capacities.
Friendly acquisitions, where both the acquiring company and the target firm support the merger, and hostile acquisitions, where the target resists the takeover, are two major kinds of acquisitions. Cash payments, stock exchanges, or both might fund acquisitions. In certain cases, the acquisition might be supported by debt financing.
Acquisitions are sometimes seen as one business taking over another; unlike mergers, which are essentially viewed as a consensual agreement to merge. Both approaches ultimately lead to the integration of business activities. Particularly in fiercely competitive sectors, acquisitions are a crucial component of corporate expansion plans since they enable companies to rapidly scale operations, enter into new markets, and boost efficiency.
Types of Acquisitions
Depending on the objective, organisation, and nature of the relationship between the target firm and the purchasing company, the acquisition of businesses can take many forms. The fundamental categories of acquisitions include:
- Horizontal Acquisition: Buying of a business manufacturing the same product within the same supply chain stage. Example: A telecommunications company acquiring another operator. Objectives are to grow market share, reduce competition, and achieve economies of scale.
- Vertical Acquisition: This is buying a company at a different phase of the manufacturing or supply chain. An example would be: A car manufacturer purchasing a tire company would do so to get sources of supply, cut costs, and improve operating efficiency.
- Conglomerate Acquisition: A company buying another from another industry is known as a conglomerate acquisition. Some examples are a food manufacturing business acquiring a Company in real estate. To mix the company and lower risk is the goal.
- Congeneric (or Product Extension) Acquisition: This is the transaction of complementary goods or services between two companies in the same sector. For example, A phone manufacturer might buy a software development company. The goal is to grow product lines and customer base.
- Reverse Acquisition: This entails private companies taking over publicly held companies to sidestep the laborious process of going public. The goal is to have fast entry to capital raising and stock markets.
How to Acquire a Company?
Adopting a structured process ensures acquisitions are made strategically and thereby minimise risks and maximise returns in the long term.
1. Define Acquisition Goals
The acquirer needs to lay out the aim of the acquisition in clear terms, which could be expanding the market, diversifying, gaining access to technology, reducing costs, or eliminating competition. Setting these goals allows for identifying target companies that are appropriate.
2. Identify and Screen Potential Target Companies
Research is conducted in order to identify those firms that are strategically complementary to the acquirer. Industry fit, financial standing, customer base, and growth potential are scrutinised. Strategic fit is needed in creating long-term value.
3. Do Preliminary Valuation
Preliminary valuation of the target company is conducted using tools like discounted cash flow (DCF), price-to-earnings ratio, or comparative market analysis. This analysis outlines whether to proceed with the target.
4. Make Contact and Negotiate
The target company is approached by the acquirer’s business, either directly or indirectly. Initial talks encompass interest in the deal, structures of the deal (equity, cash, or hybrid) and general terms.
5. Due Diligence
The financials of the target company, legal compliance, contracts, debts, assets, intellectual property, employees, and liabilities are carefully examined. Both parties benefit from this process through enhanced transparency and reduced risks.
6. Structuring the Deal
The acquisition strategy is agreed: share purchase, asset purchase, or merger. The terms of payment (cash, stock exchange, loan finance, or a mixture) are resolved. Tax and regulatory requirements are fulfilled.
7. Arranging Funding for the Purchase
The purchasing company gathers money from a mix of internal funds, banking facilities, equity issues, or other sources. The prompt execution of the transaction calls for sufficient finance.
8. Legal and Regulatory Approvals
Approvals from government agencies, competition commissions, or stock exchanges might be needed depending on the industry and jurisdiction. Compliance validates the transaction’s legal standing.
9. Signing the Arrangement
Drawn is a binding contract with terms, conditions, representations, warranties, and indemnities. Approval of the merger may call for the boards and shareholders of both businesses.
10. Closing and Integration
Full payment is done and ownership is transferred. Including personnel, systems, brands, and operations to achieve synergies, integration starts after the acquisition.
Benefits of an Acquisition
- Market Expansion – Acquisition helps a company to rapidly enter new markets, grow its customer base, and hence increase brand awareness and market share.
- Improved Profits and Revenue – Consolidation of activities can boost a company’s sales volume, enlarge its product line, and render it more profitable. Often come chances for cross-selling that produce fresh sources of income.
- Economy of Scale – Merging activities minimises costs of production, distribution, and marketing. Large-scale purchase of raw materials and shared resources lowers per-unit costs.
- Access to Technology and Innovation – Buying an organisation with superior technology, patents, or R&D capabilities provides a competitive advantage. It also saves time and resources otherwise diverted to create similar innovations in-house.
- Diversifying Business and Risk – Buying companies in other industries or new product categories reduces reliance on one operational area. Such diversification moderates risks and provides stability even if a single market segment is affected by downturns.
- Merging with rivals improves a company’s market position and lessens competition, therefore raising pricing power and profit margins.
- Skill and Talent Acquisition – The acquiring companies benefit from talented professionals, management experience, and a well-developed corporate culture, hence improving human resource skills without the need for extensive hiring and training.
- Better Financial Position – Acquisitions might result in improved cash flows, a bigger asset base, and higher borrowing capacity. Investors and creditors favour bigger, consolidated businesses.
- Organic Growth vs. Quicker Growth – Purchasing businesses accelerates growth in size, capacity, and market presence rather than gradually establishing a business. Long-term development objectives are reached more quickly via this approach.
- Strategic Interactions – Merged companies can leverage one another’s skills in branding, customer relationships, supply chains, and distribution. Better long-term viability and efficiency result from this.
Recent Acquisitions in India
These takeovers include fintech, banking, security services, renewable energy, and technology. As a whole, they represent a dynamic consolidation, strategic expansion, and growing investor interest in India’s finance and industrial sectors.
1. Amazon has taken over Axio (Fintech)
Amazon has completed the acquisition of Bengaluru-based fintech lender Axio, thus gaining a foothold in India’s direct lending market. With Axio’s credit license, Amazon is now in the position to extend credit products directly on its marketplace, something its peers, such as Flipkart, cannot do. Axio’s loan portfolio stood at about ₹22 billion (~$251 million) as of June 2025.
2. SMBC has picked up a 20% stake in Yes Bank
The Japanese Sumitomo Mitsui Banking Corporation (SMBC) has invested approximately $1.6 billion to purchase a 20% stake in Yes Bank, buying stakes from SBI and other large Indian banks. The deal has been approved by the regulators, and SMBC is not considered a “promoter,” making regulatory compliance easier.
3. SIS Ltd will acquire APS Group
SIS Ltd, India’s largest business services provider, is looking to buy APS Group for ₹600–650 crore. This is the biggest takeout of India’s private security space and will significantly boost SIS’s market standing.
4. Waaree Energies’ investment in Kotson’s Pvt Ltd
Waaree Energies has acquired 64% holding in Kotson’s Private Limited for ₹192 crore. The deal represents the move into new industries or a further integration with current business activities.
5. R Systems acquired Novigo Solutions
Blackstone-backed R Systems acquired Novigo Solutions, Mangaluru, for an initial ₹400 crore. The overall price can go up to ₹950 crore depending on the performance targets. Novigo is strong in low-code and no-code application development and intelligent automation.
Conclusion
Companies wanting to boost growth, diversify their holdings, and become more competitive in an ever-changing market have found mergers in India to be a powerful instrument. As seen in the case of global heavyweights like Amazon entering the financial services scene or domestic heroes like SIS venturing into security systems. They offer companies access to new markets, customers, and technologies, as well as industry consolidation on the side, with the improvement in regulatory regimes and the increase in cross-border investment flows. Acquisitions are set to continue transforming India’s business landscape and drive long-term economic change.
