Kotak Investment Banking Expects Overall M&A Volumes To Grow 10–15% In 2026

Kotak Investment Banking expects overall mergers-and-acquisition volumes to grow by 10–15% in 2026, supported by multiple structural and cyclical factors.

Last year, the market registered a 14% year-on-year increase in deal value to $121 billion, even as global deal volumes declined, according to Sourav Mallik, managing director and deputy CEO of Kotak Investment Banking.

Financial services, technology, consumer, and healthcare are expected to be the most active sectors in the coming year.

In 2025 financial services, technology, and industrials accounted for nearly 65% of total M&A deal value, driven by strong credit growth expectations, robust inbound capital flows, and sustained demand for technology assets.

Speaking on advisory trends and the outlook for 2026, Mallik said India continues to remain among the top 10 M&A markets globally, underlining the country’s growing relevance in cross-border transactions and strategic consolidation. While the US witnessed unprecedented deal activity in 2025, global M&A volumes declined by nearly 15% compared to the previous year.

Another notable shift was the increasing prominence of listed-company M&A. "Listed targets accounted for nearly 30% of deal value, up from 20% the previous year,” Mallik said. Nine of the top 15 transactions by value involved listed companies, reflecting greater comfort with public-market acquisitions.

Further corporate and strategic buyers remained the primary drivers of deal activity. "Ten of the top 15 transactions by value were led by strategic or corporate acquirers," Mallik noted, highlighting India Inc.’s balance-sheet strength and long-term confidence.

Minority investments also staged a strong comeback, contributing 36% of overall deal value, with nearly half of that activity concentrated in digital and enterprise technology, supported by strong AI-led growth tailwinds.

Cross-border transactions continued to dominate India's M&A landscape, accounting for almost 70% of total deal volumes. Inbound deals represented 47%, while outbound transactions rose to 23%, marking a structural increase compared to previous years. "This underscores India’s growing role as both a destination for global capital and a source of outbound strategic investments," Mallik said.

Further, Indian corporates are expected to accelerate consolidation, supported by strong balance sheets. "Leverage remains low at around 0.5x on average, with interest cover close to 5x," Mallik said. "This gives corporates significant headroom to pursue acquisitions, along with spin-offs and carve-outs," adds Mallik.

Lastly, financial sponsors are also expected to remain a key pillar of activity, backed by ample dry powder and improved valuation comfort. "Secondary market valuations have moderated back to five-year historical averages," he said, adding that sponsors have raised India-focused capital and are increasingly comfortable owning controlling stakes in listed companies.

Successful exits in recent years have further strengthened sponsor confidence. A notable structural shift is the emergence of family offices and high-net-worth individuals as a distinct and growing investor category in M&A transactions. "We now view them as a separate pool of capital and actively market deals to them," Mallik added.