This is an era when mergers and acquisitions are evolving quicker with the flourishing start-up scene in India. In 2025, activity plays out in front of each founder and investor, whether for strategic reasons or due to companies being in distress. Such increased transaction activity signifies a shift in market dynamics: a new consumer habit emerging, venture capital not so freely flowing now, and regulations playing their role in front.
Understanding Strategic vs Distress M&A
A strategic M&A is about companies acting as buyers to enhance their competitive positioning. The acquisitions are a shortcut to:
- Entering new markets
- Acquiring technological innovation
- Scaling operations
For instance, acquiring a company that perhaps has already built a loyal customer base or possesses unique technology can save the acquirer several years of slow organic growth.Â
On the other hand, distress M&A targets companies that are financially incapacitated. Although the target companies may be in distress, it is possible that they hold significant intellectual property, human resources, or market share that makes them attractive to a buyer who is looking for bargains.
The 2025 Perspective: M&A trends in India 2025
According to Bain & Company’s 2024 India M&A Report, deal activity in the country rose 18% on a year-on-year basis, thus creating one of the most active windows in the recent past. The year 2025 is seen as an extension of the active window, or its enhancive phase toward growth in the aspiration would also be on a side of survival instinct. Fintech, ed-tech, and health-tech industries are witnessing strategic consolidations where the companies are trying to build ecosystems on the whole. Meanwhile, e-commerce and mobility are areas witnessing distress deals because of negative margins and high cash burn.Â
Strategic M&A Case Study: Zomato Acquires Blinkit
Another example of strategic M&A is Zomato’s acquisition of Blinkit (earlier Grofers) in 2022. The bold decision allowed Zomato to plunge into the evolving quick commerce space, complementing its food delivery with grocery and essentials delivery. This fusion created wider markets for Zomato and CPA-ed it against its competitors Swiggy and Dunzo. Today, the revenue growth of Zomato is largely fueled by Blinkit, bearing testimony to the fruition of strategic M&A undertaken with utmost precision.
Distress M&A Case Study: BYJU’S and the Distress DilemmaÂ
BYJU’S, on the other hand, gives a dark side to the tale of aggression in the M&A markets in India. Between 2020 and 2022, BYJU’S aggressively acquired several edtech companies across the globe. But by 2024, the company found itself facing liquidity crunch and operational challenges.Â
The distress sale of WhiteHat Jr. in 2024 emphasized the hazards of overreaching. What perhaps started as an attempt to preempt and dominate the market turned into a series of distress-driven M&A activities, as BYJU’S tried to sell off non-core assets to shore up its finances. The situation brings to the fore that only sustainable growth with prudent financial management is desirable. Â
Market Drivers in India in 2025
Private Equity
Private equity will emerge as a strong force in M&A in 2025, while supporting strategic growth and distress transactions through buy-and-build strategies, consolidation of sectors, and audacious investments in scalable businesses in core industries. Â
As private equity firms take on more deals, the role of CFOs in M&A becomes pivotal in overseeing capital structuring and ensuring financial sustainability post-acquisition.
Regulatory Shifts
The changing regulatory scenario in India, especially seen through the prism of data localization, digital payments, and sector-specific compliance, has forced companies into hurried acquisition routes for compliant entities rather than building those capabilities from scratch.
Technological Innovations
The development of AI, blockchain, and IoT is revolutionizing sectors. Firms are competing to purchase disruptive tech startups to remain competitive and cause a surge in strategic M&A in technological innovations.
Key Statistics
- 300+ M&A deals recorded in India during 2024
- 35% of these were distress-driven deals
- Fintech sector led with 70 strategic deals, showcasing industry consolidation
- E-commerce distress sales rose by 40% over 2023, highlighting profitability pressures
(Source: Tracxn)
Implications for Founders
For entrepreneurs, today’s situation is a combination of great opportunities and challenges. Strategic acquisitions can truly turbocharge growth and drive penetration, but they require serious due diligence, cultural fit, and careful integration planning. Conversely, entrepreneurs from struggling companies need to focus on open negotiations, protect the interests of employees, and maintain brand integrity, even during challenging times. Preparing for different contingencies—either for expansion or an exit—is crucial in today’s uncertain environment.
Executive Summary
India’s startup ecosystem during 2025 is seeing a significant surge in mergers and acquisitions (M&A), both driven by strategic expansion as well as distress selling. Strategic transactions, such as Zomato’s purchase of Blinkit, demonstrate the manner in which companies are leveraging M&A for diversifying and expanding rapidly. Conversely, BYJU’S is a reflection on the dangers of overstretching, resulting in distress asset sales.Â
According to Bain & Company and Tracxn:
- 18% rise in M&A volume in 2024
- 300+ transactions, with 35% in distress category
The main drivers for this trend are reduced VC funding, regulatory shifts, and the competition to purchase emerging technologies. For founders, there are risks as well as opportunities in this climate, highlighting the necessity for due diligence, financial discipline, and a long-term horizon. Strategic realignment and flexibility will be essential to surviving the increasingly changing M&A environment.
For expert support, trust Mantraa, India’s top financial advisory for seamless M&A services. Contact us today to drive strategic growth through smart acquisitions.
