India's M&A Market in 2025: Deal Structures Are Getting More Creative

CXO India Insights reviewed 89 M&A transactions in the Indian market with disclosed deal values above ₹100 crore completed in the first nine months of 2025. The structural complexity of these deals has increased meaningfully relative to the prior two years — reflecting a more challenging environment where buyers and sellers are finding it harder to agree on upfront valuations. Earnouts — where a portion of the deal consideration is contingent on post-acquisition performance — appeared in 34% of the transactions we reviewed, up from 19% in 2023. The increased prevalence reflects both valuation uncertainty and a more sophisticated acquirer base that is willing to share upside with sellers if the business delivers on its projections. However, earnout structures in India remain imperfectly drafted more often than not: CXO India has observed several post-deal disputes where the earnout metrics were ambiguous enough to support radically different interpretations, generating litigation that eroded the goodwill the deal was designed to create. Structured equity arrangements — where the seller retains a minority stake with specific exit mechanisms — are becoming more common in PE-led transactions as sellers seek continued upside participation. Vendor financing, where the seller effectively provides bridge finance to the buyer as part of the deal consideration, has also grown in prevalence, particularly in mid-market deals where bank financing has become more cautious. Each of these structures creates complexity that requires sophisticated legal and financial advisory — and boards that are governing M&A processes need to ensure their advisers are genuinely equipped to navigate it.