Core Insights - India's mergers and acquisitions (M&A) pipeline is expected to remain robust in 2026, building on a strong rebound in dealmaking through 2025, with domestic consolidation reaching $104 billion and inbound transactions rising to $30 billion [10][11] - Outbound M&A activity surged to $22 billion, the highest level in a decade, driven by overseas purchases from companies like Tata Motors and Tega Industries [10][11] - The nature of inbound M&A is shifting towards value-focused investments rather than volume-driven, with transaction values increasing despite a decline in the number of deals over the past three years [7][11] Domestic M&A Trends - Domestic consolidation is a defining trend as Indian companies focus on strengthening their positions at home while selectively pursuing overseas opportunities [3][11] - Mid-sized companies, previously absent from M&A transactions, are now actively pursuing acquisitions, as evidenced by recent deals such as Mankind Pharma's acquisition of Bharat Serums and Vaccines [5][11] Inbound M&A Dynamics - Inbound transactions are expected to remain strong in sectors like financial services, consumer-facing businesses, and infrastructure, appealing to long-term foreign investors [6][11] - The largest inbound deal in financial services was Mitsubishi UFJ Financial Group acquiring a 20% stake in Shriram Finance for $4.4 billion, followed by significant investments from Emirates NBD and Sumitomo Mitsui Banking Corporation [8][11] Regulatory and Economic Factors - Recent regulatory changes, including allowing banks to finance M&A transactions and raising foreign direct investment limits in insurance, are expected to catalyze deal activity [8][11] - Expectations of lower interest rates in the US could provide additional support for M&A activity, as a softer rate environment typically reduces borrowing costs and improves deal economics [9][11]