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Acquisition funding from Indian banks reportedly exceeds ₹10,000 crore since July, after revised rules opened domestic bank borrowing to corporate buyers while keeping safeguards applicable.
Key Highlights
More than ₹10,000 crore in bank funding has gone towards about 12 acquisitions since 1 July 2026, the start date of the revised acquisition-finance framework. Banking journalist Saloni Shukla reported these figures on 22 October 2026, citing people familiar with the transactions. Her report identified SBI and private lenders HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank and RBL Bank among the domestic participants.
For eligible Indian companies planning strategic takeovers, domestic bank borrowing is now available where combining the businesses is intended to create long-term value. The buyer must repay that borrowing. Approval requires the lender to examine the proposed repayment arrangements as well as the risks of the acquisition. The revised rules retain both checks.
The direct beneficiaries are qualifying corporate buyers. An Indian non-financial company seeking control of another non-financial business falls within the framework, whether the target operates in India or overseas. Borrowers comparing personal and business loans face different requirements; acquisition loans have a separate set of eligibility conditions.
Access expands for established companies that meet the financial thresholds, rather than for borrowers generally. Domestic banks offer these buyers another source of acquisition funding. Alongside the purchase price, a buyer must work out its contribution and how it will repay the debt. Bank funding supports the transaction; it does not replace the buyer’s financial commitment.
Anu Aggarwal, Head of Corporate and Transaction Banking at Kotak Mahindra Bank, said banks had closed more than 12 transactions since July. She explained that Kotak either funds transactions from its own balance sheet or underwrites and syndicates them, depending on their size. The work extends to escrow accounts for funds, demat services and foreign-exchange transactions.
In their 16 September 2026 analysis, legal advisers Swapnil Phadnis and Dippyaman Bhattacharya described permission directed at established, profitable non-financial acquirers. Only a limited group qualifies under those conditions. A company planning a takeover therefore needs to establish that both its finances and the proposed transaction meet the requirements before including bank borrowing in its funding plan.
The revised framework ties financing to an independent assessment of acquisition value. The agreed purchase price alone does not determine the lending ceiling. Borrower qualifications also apply, as set out in the official directions dated 30 March 2026.
The buyer generally provides the remaining amount from its own funds. Listed acquirers can use bridge finance under specified conditions, including repayment through permitted sources within 12 months. This exception carries a repayment deadline; it does not remove the buyer’s contribution requirement.
A qualifying acquisition must also fit within the lender’s available capacity. The concentration-risk directions issued on 30 March 2026 reserve no more than 20% of a bank’s eligible capital base for aggregate acquisition-finance exposure. This allowance forms part of the overall 40% capital-market exposure ceiling.
Borrowers need to distinguish the transaction limit from the lender’s portfolio limit. The 75% cap concerns financing for an acquisition. The 20% cap concerns the bank’s acquisition-finance portfolio. Compliance with either limit does not remove the requirement to meet the other.
A lender’s risk profile and business strategy may lead it to set ceilings below the regulatory maximum. Consequently, meeting the borrower requirements does not oblige a lender to fund the maximum permitted amount. A company’s eligibility and a bank’s willingness to lend remain separate decisions.
The framework’s original implementation date was 1 April 2026, as specified when authorities issued the final rules on 13 February 2026. Banks and capital-market intermediaries subsequently raised operational questions. Requests for more preparation time also came from industry associations.
The regulator’s decision of 30 March 2026 gave them until 1 July 2026 and changed several provisions. A government news update published on 31 March 2026 reported the postponement. It also covered revised arrangements for companies financing acquisitions through subsidiaries in India and abroad.
Refinancing received specific conditions too. The acquisition must be complete and the buyer must have established control over the target before refinancing acquisition debt. Those funds must repay acquisition-finance debt, not return the buyer’s contribution. Where a subsidiary or special-purpose vehicle receives the acquisition loan, the acquiring company must provide a corporate guarantee.
Reported acquisition funding above ₹10,000 crore reflects domestic banks’ lending under the revised rules. For corporate borrowers, the opportunity rests on transaction quality, financial eligibility and lender capacity. The reform expands funding choices while keeping approval tied to the buyer’s ability to support the acquisition debt.
Acquisition finance provides funding for an eligible company to acquire control of another business.
Under India’s revised rules, qualifying strategic purchases involve non-financial companies.
Implementation began on 1 July 2026 after authorities deferred the framework’s original start date of 1 April 2026.
Banks could adopt it earlier in full.
Eligible Indian non-financial companies can obtain bank funding to acquire control of qualifying businesses.
Approval depends on financial eligibility, transaction conditions and the lender’s assessment.
Total bank financing cannot exceed 75% of independently assessed acquisition value.
The acquiring company provides the balance, subject to the permitted bridge-finance exception for listed acquirers.
No. The figure describes acquisition funding reported on 22 October 2026, based on people familiar with the transactions.
It is not a government allocation.
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