Indian banks have deployed over Rs 10,000 crore — yaani Rs 100 billion — into merger and acquisition transactions since the Reserve Bank of India eased takeover financing rules, The Economic Times reported on October 22, in a report summarised by Daily Yield's India finance round-up.

Source: The Economic Times via Daily Yield

Under the changed rules, which took effect on July 1, domestic banks can fund up to 75% of an acquisition's independently assessed value. Before the change, Indian companies largely depended on foreign banks or private credit funds for transaction capital, Whalesbook's summary of the ET report said.

Source: Whalesbook (summarising ET)

State Bank of India has emerged as a key player, having led nearly a dozen such transactions, according to the report summary. HDFC Bank, ICICI Bank, Kotak Mahindra Bank and Axis Bank are also actively participating, often partnering with global firms such as HSBC and Citibank on larger syndications.

The acquisition-financing market is estimated at nearly Rs 2 lakh crore — yaani Rs 200,000 crore — on increased demand, the ET report said. The summaries note the shift lets Indian lenders take market share from foreign institutions and earn more fee-based revenue, while also carrying the higher credit risks that come with large corporate buyouts.