Large Cross-Border Deals: India’s financial sector has witnessed unprecedented cross-border deals in 2025, signaling growing investor confidence in the country’s banking and non-banking financial markets. Between January and September, mergers and acquisitions (M&A) worth $8 billion were concluded, marking a 127% increase compared to the same period in 2024, according to Grant Thornton.
The year has been notable for rare transactions involving foreign banks acquiring significant stakes in Indian lenders, along with major private equity and corporate investments in both banks and non-bank financial companies (NBFCs). Analysts suggest these deals reflect the attractiveness of India’s expanding retail and corporate banking markets, coupled with regulatory reforms encouraging foreign participation.
With these transactions, global investors are not just entering India—they are taking substantial stakes that influence management, strategic direction, and operational synergies, making 2025 a landmark year for foreign investment in India’s financial services sector.
Cross-Border Deals in 2025
1. Emirates NBD Acquires 60% Stake in RBL Bank
Dubai-based Emirates NBD made headlines by acquiring a 60% stake in RBL Bank for $3 billion, the largest overseas acquisition in India’s financial sector this year.
- The acquisition allows Emirates NBD to access RBL Bank’s extensive branch network in India.
- The Middle Eastern lender plans to merge the network with its local subsidiary, enhancing its footprint in the Indian market.
This transaction demonstrates the growing interest of Middle Eastern banks in India’s retail and corporate banking segments.
2. SMBC Buys Stake in Yes Bank
Japan’s Sumitomo Mitsui Banking Corporation (SMBC) acquired a 20% stake in Yes Bank in May for $1.6 billion, purchasing the stake from Indian banks that rescued Yes Bank in 2020.
- In September, SMBC increased its stake by an additional 4.99%, consolidating its presence.
- The deal provides SMBC with exposure to India’s fast-growing banking sector and strengthens strategic partnerships with local banks.
3. Blackstone Invests in Federal Bank
Private equity giant Blackstone, via its Singapore-based affiliate, agreed to invest 61.97 billion rupees ($705.05 million) for a 9.9% stake in Federal Bank through preferential equity shares.
- Blackstone’s affiliate, Asia II Topco XIII Pte Ltd, gains the right to nominate one non-executive director to Federal Bank’s board.
- The deal underscores private equity interest in India’s mid-sized banks, particularly those with strong retail and corporate lending operations.
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4. IHC Acquires Stake in Sammaan Capital
Abu Dhabi’s International Holding Company (IHC) agreed to invest nearly $1 billion for a 43.5% stake in Sammaan Capital, a non-bank lender specializing in housing loans.
- IHC will launch an open offer to acquire an additional 26% from retail investors, per Indian takeover regulations.
- This deal is among the largest investments in India’s non-bank financial sector this year, highlighting the growth potential in housing finance.
5. Warburg Pincus and ADIA Invest in IDFC FIRST Bank
In April, Warburg Pincus and Abu Dhabi Investment Authority (ADIA) jointly invested $877 million in IDFC FIRST Bank via convertible preference shares.
- On conversion, the two funds will hold a combined 15% stake.
- This strategic investment targets banks with a strong retail and digital banking presence, reinforcing the trend of foreign capital in India’s banking sector.
6. Bain Capital Acquires Stake in Manappuram Finance
Bain Capital acquired an 18% stake in Manappuram Finance for $508 million in March.
- Bain plans to increase its holding to over 40% via an open offer to retail investors.
- Manappuram Finance, a leading gold-loan NBFC with 5,300 branches, provides a significant platform for private equity investment in India’s NBFC segment.
7. Bajaj Group Buys Back Stake from Allianz
India’s Bajaj Group repurchased a 26% stake in its joint ventures—Bajaj Allianz General Insurance Ltd and Bajaj Allianz Life Insurance Ltd—from Allianz for $2.8 billion in March.
- This move ended a decade-long partnership with Allianz.
- Allianz subsequently partnered with Reliance-owned Jio Financial Services to establish new general and life insurance businesses in India.
Implications of Cross-Border Investments
The surge in cross-border deals in 2025 signals several trends:
- Foreign banks are expanding rapidly in India, acquiring stakes in both public and private sector banks.
- Private equity and sovereign wealth funds are targeting mid-sized banks and NBFCs, reflecting confidence in India’s lending growth.
- The deals highlight India’s attractiveness as a financial hub, driven by regulatory support, digital banking growth, and a rising retail lending market.
- Strategic stakes often involve board representation and management influence, ensuring that foreign investors play an active role in shaping growth strategies.
These transactions are expected to enhance competition, bring global expertise, and increase capital inflows, boosting the overall resilience and modernization of India’s financial ecosystem.
Conclusion
2025 has emerged as a landmark year for India’s financial sector, with cross-border M&A activity reaching unprecedented levels. From Emirates NBD’s acquisition of RBL Bank to IHC’s investment in Sammaan Capital, foreign capital is increasingly shaping the trajectory of Indian banking and NBFCs.
These deals not only inject much-needed capital but also introduce global expertise, technological innovation, and strategic partnerships. By allowing foreign investors board representation and operational influence, Indian banks are positioned to enhance governance and scale their operations efficiently.
The trend is likely to continue as India’s economy grows, financial reforms mature, and international investors seek exposure to one of the world’s fastest-growing banking markets. Both foreign banks and private equity players are poised to benefit from India’s expanding credit demand and robust digital infrastructure.
For Indian financial institutions, these cross-border investments are more than capital infusions—they are opportunities to integrate global best practices, strengthen risk management, and expand their market reach.
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Frequently Asked Questions
1. Which was the largest cross-border financial deal in India in 2025?
The largest deal was Emirates NBD’s $3 billion acquisition of a 60% stake in RBL Bank, providing the Dubai-based bank access to RBL’s extensive branch network and a platform to expand in India.
2. How much foreign investment flowed into India’s financial sector in 2025?
Between January and September 2025, cross-border M&A deals worth $8 billion were completed, representing a 127% increase over the same period in 2024, according to Grant Thornton.
3. What role do private equity firms play in India’s financial sector?
Private equity firms like Blackstone and Bain Capital invest in mid-sized banks and NBFCs, often taking strategic stakes that allow board representation and operational influence, while providing capital for growth and expansion.
4. What trends are driving foreign investment in India’s banks and NBFCs?
Key drivers include India’s expanding retail banking market, digital adoption, regulatory reforms encouraging foreign participation, and attractive growth opportunities in both banking and non-bank lending segments.
5. How does foreign investment benefit Indian financial institutions?
Foreign investors bring capital, global expertise, governance standards, and risk management knowledge, which help Indian banks and NBFCs scale operations, modernize technology, and compete effectively in a growing financial market.