M&A as a Corporate Strategy to Leverage Technology, Embrace Digital Disruption in India

Posted by Written by Naina Bhardwaj Reading Time: 7 minutes

Digital insurgents are leveraging changed circumstances after the pandemic to revolutionize India’s corporate landscape. This has been aided by the country’s fast developing digital infrastructure and various enabling regulatory frameworks. We discuss how traditional Indian conglomerates are responding to the emergence of digital disruptors, favoring mergers and acquisitions (M&As) as a corporate strategy. We also look at the scope, capability deals, and portfolio overhaul as large firms actively invest in new digital growth engines. Finally, we list recent trends in India’s dealmaking ecosystem, which has expanded multifold in the recent years.

The traditional business landscape, as we know it, has been evolving at breakneck pace, enabled by innovation and digital transformation. Frontier technologies, in particular, are inducing a fourth industrial revolution, led by emerging technologies like artificial intelligence (AI), blockchain, and 5G.

Motivated by international cooperation and competition, leading economies including India, the United States, China and the European Union, have all strived to invest heavily in these frontier technologies. Tech-based partnerships also appear to be gaining a precedent in international politics. The impetus on technological cooperation to aid economic expansion in the recent Indo-Pacific Economic Framework (IPEF) Ministerial conference is testimony to its growing importance.

These technological innovations have been further catapulted by the COVID-19 pandemic, majorly altering consumer behavior, business operations, and reshaping global economies. As a result, traditional businesses have had to revamp their corporate strategies, marketing systems, and work models.

Additionally, as the global economy is increasingly characterized by financial uncertainty, geopolitical instability, and rapidly shifting consumer preferences, global C-suite executives are aware that business agility and adaptability are essential for companies to stay relevant. Consequently, multinational corporations and smaller enterprises across all sectors have been embracing technology, diversifying non-core businesses, and tapping into new markets through acquisitions, amalgamations, and fundraising. All this has led to a flurry of deal activity, both globally, as well as in India.

How has technology changed the business landscape?

Digitization is a multifaceted process with varying manifestations across the value chain, be it in the form of supply chain automation, digital tokenized currencies, mechanized distribution platforms etc.

Such digitization, which is an ongoing process, has given rise to not just digital trade in commodities and services but also cross border data flows. Consequently, global policymakers have recognized the need to regulate this new manifestation of global trade, including governance of taxation implications as well as ensuring equitable distribution of risks and associated with such data transfer.

Some of the examples of successful digital disruptions include rise of the platform economy with Uber, Amazon, Facebook, Airbnb, augmented/virtual reality (AR/VR), automated HR (human resource) processes, 3D printing etc.

Tech-enablement placing India on global unicorn map

In India too, tech trends like automation, AI, machine learning (ML), internet of things (IoT), and data analytics are disrupting traditional business models. As per a recent report titled “India Tech Trends”, the aggregate valuation of Indian tech unicorns (enterprises that have struck the US$1 billion-valuation mark) is pegged at US$535 billion in 2022, a substantial jump from US$103 billion in 2015.

While India’s digitalization story began much before 2020, the pandemic-led disruptions have further augmented the role played by technology. This has been thoroughly leveraged by start-ups and digital insurgents across sectors like finance, retail, technology, manufacturing, logistics, etc. In fact, India is among the top three countries recording new unicorns, next only to the US and China, with e-commerce and fintech unicorns leading the way.

India’s Unicorn Landscape, as of August 2022


No. of unicorns

Name of unicorns



Cars24, Dealshare, Meesho, Mensa, MogliX, Nykaa, Droom, Firstcry, Shopclues, Paytm Mall, Udaan, Infra Market, Mamaearth, Spinny, Snapdeal, Lenskart, Livspace, Licious, Globalbees, CommerceIQ, Flipkart, The Good Glamm (previously MyGlamm), OFbusines



Acko, BharatPe, BillDesk, Chargebee, Paytm, Mobiwik, Oxyzo, PhonePe, Pine Labs, Coin DCX, Coinswitch Kuber, CRED, Slice, Razorpay, Cred Avenue, DIGIT, Groww, Policy Bazaar, Zerodha, Zeta, Open, OneCard

Enterprise Tech


Amagi, Apna, Browser Stack, Freshworks, Postman, Zetwerk, Gupshup, Darwinbox, Zenoti, Zoho, Hasura, Mind Tickle, MApmyindia, Fractal, Mu Sigma, Uniphore, Inmobi, Druva, Icertis

Consumer Services


Bigbasket, CarDekho, Grofers, Info Edge, Quikr, Rebel Foods, Swiggy, Zomato, Urban Company

Media and Entertainment


Dailyhunt, Glance, Games 24 Seven, Mobile Premier League (MPL), Hike, Dream Sports, Share Chat



Byju’s, Eruditus, Unacademy, Lead, Upgrad, Vedantu



Delhivery, Xpress Bees, Elasticrun, Blackbuck, Rivigo



Pharmeasy, Cure Fit, Innovaccer, Pristyn care

Travel Tech


OYO, Ease My Trip, Make My Trip

Transport Tech


Ola, Ola Electric



Renew Power

Real Estate Tech



It is interesting to note that this rapid growth of industry disruptors, or insurgents, across multiple sectors geographies and business fields like Fintech, Edtech, E-commerce etc. drove India’s M&A activity to an all-time high in 2021 and sustained robust deal activity in the first half (H1) of 2022. These unicorns are aggressively trying to upscale capabilities to deliver a comprehensive omnichannel experience to consumers. For instance, EdTech insurgent BYJU’s has made over 11 acquisitions valued at over US$2 billion, of which approximately US$1 billion went towards acquiring Aakash Educational Services, an offline test prep company, to build an omnichannel learning offering for its test-prep vertical. Oyo, the Indian hospitality chain, too, has entered many new markets like the EU to expand its scale of operations.

M&A in India: Trends and outlook

Despite economic headwinds from the pandemic and looming uncertainties triggered geopolitics, deal activity in India witnessed a record high in 2021 with 598 deals valued at US$112.07. The pandemic crisis and resultant traditional business capability gaps were leveraged by startups and digital insurgents across sectors like finance, retail, technology, manufacturing, logistics, etc. In 2021, more than 70 percent of the deals concluded in India were in the technology sector, with an inclination towards consumer goods, marketplace platforms, FinTech, and EdTech companies.

M&A in India

This upward momentum has sustained, with a total of 561 deals reached as of September 2022, as per data by Venture Intelligence. Large strategic investments or takeovers continued to dominate the deals space in 2022, where 14 deals (as of September 17, 2022) have been reported as high deal value transactions (more than US$1 billion in value). Major sectors attracting these mega deals include information technology (IT), pharmaceuticals, mobile services, media and entertainment, renewables, infrastructure, education, banking, etc. In 2021, high deal value transactions had peaked at 23 deals.

M&A as corporate strategy

In the first six months of 2022, the highest reported transaction as per deal size took place in the IT sector, with the acquisition of Mindtree Consulting by L&T Infotech at a valuation of US$7.72 billion. Other notable deals in the digital space in 2022 include :

  • Acquisition of e-commerce platform Blinkit by Zomato in June 2022 for US$578 million
  • Acquisition of online eyewear platform Owndays by Lenskart in June 2022 for US$400 million
  • Acquisition of logistics service provider Pickrr by Shiprocket in June 2022 for US$200 million
  • Acquisition of hyper-automation services provider Vuram by WNS in July 2022 for US$165 million
  • Acquisition of Clovia by Reliance Retail Ventures in May 2022 for US$125 million

In H1 2022, acquisitions in technology and healthcare, availability of private equity, and abundant cash reserves coupled with historically low-interest rates, have propelled M&A growth in India.

Which are the top sectors attracting maximum M&A deals in India?

Since 2015, the IT & ITeS sector has dominated M&A deals, followed by manufacturing, healthcare, and banking and financial services. In terms of deal value, the technology, entertainment, power, and financial services sectors emerged as front-runners.

Top sectors with maximum M&A deals

Top sectors for M&A in India by value

Looking at the trends for the first quarter (Q1) of 2022, EnterpriseTech emerges to be the hottest sector for M&A activity in Indian start-ups, recording 26 deals. Most of these EnterpriseTech takeovers have been to boost the acquiring company’s house of brands or to allow them to acquire new-age technologies these startups are developing. For example, PhonePe’s acquisition of GigIndia for enterprise payments, and Gupshup’s acquisition of cloud-based telephony startup, Knowlarity were motivated by through the acquirer’s interest in the startup’s technology.

Sectoral breakdown of 100 M&A in Q1 2022

E-commerce, too, was the single largest segment in terms of M&As in 2021. Direct-to-Customer (D2C) is the fastest growing ecommerce subsegment, with a total market opportunity worth US$302 billion by 2030, registering a 23.8 percent growth.

In financial services, non-banking financial companies (NBFCs) showed resilience in 2021 despite the pandemic and this momentum is expected to continue in 2022. In the healthcare and education sectors, deal activity registered a steady increase, sustained by large deals such as the US$1.4 billion fundraising round by Byju’s from multiple investors and Zydus Animal Health’s US$398 million buyout by a consortium led by multiples private equities.

Top bidding countries for M&A in India by value

How are business conglomerates dealing with digital disruptors?

Businesses resorting to scope and capability deals

Recent trends indicate that companies are focusing more on the volume of deals rather than its valuation, with an aim to not just grow their businesses but also transform them. This also explains the shifting trend towards increasing number of scope deals in India, nearly accounting for 40 percent of total transactions. In 2021, scope and capability deals accounted for almost 46 percent of all strategic deals above US$75 million closed.

Most conglomerates are investing in future tech-aided growth engines with the intention of hedging against disruption of a core business. They also facilitate the process shifting business boundaries in newly accessible adjacent markets. For instance, PharmEasy, India’s leading healthtech player, made multiple acquisitions to enter new verticals, including a 66 percent stake in Thyrocare to strengthen its high-margin testing business by tapping into Thyrocare’s wide network of collection centers.

Portfolio overhaul by conglomerates to invest in new growth engines

Indian corporations are revamping their portfolios through M&A, wagering on future profit pools in areas such as digital insurgents, electric vehicles, etc. by trimming ownership in legacy assets. For example, the Tata Group is actively reshaping its portfolio and has completed 21 deals over the past two years, including multiple acquisitions to build out its super app and to consolidate its position in consumer goods.

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