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RBI’s Acquisition Financing Guidelines
A Defining Moment for India’s Mid-Market
In October 2025, the RBI introduced a framework that could transform the landscape of corporate growth in India. For the first time in decades, Indian domestic companies can tap domestic bank tier-1 credit to finance acquisitions. These guidelines are expected to be a structural reform that empowers India’s growth-stage businesses to use institutional credit to scale through strategic acquisitions. It brings M&A within the reach of mid-sized enterprises that have long relied on internal accruals or private credit.
Closing the Gap between Aspiration and Access for Mid-Market India
Mid-market enterprises form the productive engine of India’s economy. They are profitable, resilient, and deeply entrenched in regional markets, yet constrained by limited access to structured financing for expansion. Until now, acquisitions — the most direct route to growth and market consolidation — were feasible mainly for large corporates and PE-backed firms.
For years, mid-sized companies relied on NBFCs, private credit funds, equity capital or offshore borrowings to fund acquisitions. These routes carried high interest rates and came with limited flexibility. With regulated bank credit expected to be priced at much lower rates, deal affordability and financial sustainability will improve dramatically.
The policy’s real power lies in how it will reshape India’s industrial fabric. Sectors such as infrastructure, pharmaceuticals and healthcare, and consumer goods stand to gain the most. These sectors are characterized by fragmentation, where multiple small players compete within unorganized or semi-structured markets.
For a healthcare company looking to integrate smaller hospitals, a consumer brand seeking to acquire regional competitors, or an infrastructure player planning to scale operations, this policy creates a viable route to grow inorganically. What was once aspirational now becomes achievable.
The United States offers a compelling precedent. From the 1980s onward, acquisition financing became a central engine of American corporate growth. Commercial banks and investment institutions actively financed leveraged buyouts and strategic mergers through syndicated loans and high-yield debt.
This access to structured leverage enabled consolidation across sectors such as telecommunications, manufacturing, and consumer products. Giants like AT&T, Pfizer, and Procter & Gamble expanded their reach and efficiency through M&A, often backed by acquisition loans.
Learning from the U.S.: Credit as a Growth Catalyst
India is now on the threshold of a similar transformation — one anchored in prudence but fueled by opportunity. As consolidation accelerates, the resulting enterprises will be better positioned to attract institutional investors, expand exports, and compete globally. The multiplier effect on productivity, employment, and formalization will extend beyond the boardroom to the broader economy.
At Evernile, we view this as a critical point for India’s mid-market ecosystem. The RBI’s move aligns with what we have long observed in the field: strong operating companies with credible promoters, sustainable margins, and a vision to scale, but constrained by the lack of structured acquisition capital.
This policy bridges that gap. It enables these businesses to think bigger, act faster, and grow strategically. We believe it will unlock a new cycle of homegrown consolidation stories in the coming years, led by mid-market companies across diverse sectors.
How We at Evernile See the Road Ahead
Chat with Us
At Evernile, our focus remains on partnering with promoters to identify the right M&A opportunities, design capital-efficient deal structures, and align financing pathways that accelerate scale.
If you are exploring acquisition-led growth or want to understand how this RBI reform can impact your expansion roadmap, we would be happy to have a conversation.
Reach out to me at dmitra@evernile.com
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