Indian companies continue robust outbound M&A activity despite West Asia tensions, driven by supply-chain diversification, FTAs, and market expansion, according to HSBC India's Ajay Sharma.

The largest outbound deal highlighted is Sun Pharmaceutical Industries’ $11.75 billion acquisition of Organon & Co in April 2026.

Financing options have expanded, including foreign currency term loans via overseas subsidiaries, external commercial borrowings, overseas bond issuances, and RBI’s rupee financing framework for eligible acquisitions, exemplified by the Waaree Renewable Technologies transaction.

Preferred destinations remain the US, UK, and Europe, with rising interest in Saudi Arabia, the GCC, Southeast Asia, and Latin America.

Outbound activity spans multiple sectors, including technology and IT services, industrials and automotive, pharmaceuticals and life sciences, chemicals, manufacturing, and electronics manufacturing services.

M&A momentum continues with a focus on strategic capabilities in AI, deeptech, and semiconductors, particularly among IT services and fintech firms.

Indian firms plan to maintain domestic investment alongside overseas expansion, continuing investment in local manufacturing, infrastructure, and capabilities to meet rising demand.

Long-term drivers include China+1 supply chains, FTAs, proximity to customers, and policy tailwinds like Make in India, which lower entry barriers and enable global branding and supply chains.

HSBC expects activity to remain capability-driven rather than purely scale-driven, supported by strong corporate balance sheets and globalization trends.

First-quarter 2026 set a record with 56 outbound M&A transactions totaling $3.9 billion; April surged to 103 deals worth $18.7 billion, the strongest monthly performance since May 2022.