Among India’s listed firms, mergers and acquisitions (M&A) have become less frequent over the past two decades, though they have begun to recover after 2020. At the same time, the proportion of transactions classified as substantial acquisitions under the Securities and Exchange Board of India’s (SEBI) takeover framework has reportedly risen from less than one-fifth to about 60 percent. These trends raise questions about how successive changes in corporate ownership and control are monitored. Under SEBI’s Substantial Acquisition of Shares and Takeovers Regulations, 2011, eligible shareholders holding at least 25 percent may acquire up to 5 additional percentage points annually without triggering an open offer, subject to prescribed limits and conditions.
The Competition Commission of India (CCI) determines which combinations must be notified for competition assessment, subject to statutory thresholds and exemptions. The Competition (Amendment) Act, 2023 introduced a deal-value threshold, while applicable exemption rules identify transactions that need not be notified.
Successive acquisitions may therefore comply with securities regulations while remaining exempt from competition notification. Although individual ownership changes may be disclosed, fragmented regulatory information can make their cumulative implications harder to assess. The challenge is to improve visibility without undermining legitimate exemptions.
Three Forms of Gradual Consolidation
Gradual consolidation can be classified into three forms, each with distinct implications for regulatory oversight.
The first is private-sector accumulation, in which a corporate promoter, domestic or foreign, builds its stake through successive transactions. The second is internal consolidation, in which promoters increase their stakes in group companies they already control. The third is state-led recapitalisation, illustrated by increases in government shareholding in thirteen public-sector banks and financial institutions between 2010 and 2022, with a period that includes capital infusions under Mission Indradhanush, announced in 2015, and subsequent recapitalisation measures.
These forms of consolidation raise different regulatory questions: private-sector accumulation about control and competition, internal consolidation about promoter entrenchment and minority-shareholder protection, and state-led recapitalisation about capital adequacy and public-policy objectives.
An M&A Market with Inside Bidders
In the conventional takeover model, dispersed ownership allows outside bidders to acquire shares and challenge underperforming management. An initial stake, or toehold, can help them build towards a contest for control. In India, where business groups are prominent and promoters often already control listed firms, incremental acquisitions can deepen existing control without transferring it to a new owner.
An analysis of listed Indian firms from 2000 to 2024, covering more than 20,000 transactions, finds systematic differences by ownership structure. Among firm-years with M&A activity, business-group affiliates have about 60 percent higher odds than standalone firms of selling assets and 40 percent higher odds of merging, but about 30 percent lower odds of a share-acquisition transaction. A 10-percentage-point increase in promoter ownership is associated with about 6 percent lower odds of a share-acquisition transaction and a similar increase in the odds of a merger.
These findings are consistent with greater reliance on internal restructuring among business-group affiliates, although they do not establish that transactions are structured to avoid regulatory notification. They nevertheless underscore the importance of examining cumulative ownership changes across regulatory systems.
What Green Channel Records Reveal About Ownership
The CCI’s Green Channel, introduced in August 2019, provides a self-certification route for qualifying combinations considered unlikely to raise competition concerns. Between 2019 and 2025, eleven notices involved business groups transferring stakes among entities under common promoter control. All eleven proceeded through the Green Channel’s self-certification mechanism.
These transactions illustrate changes in shareholding within existing structures of promoter control, but Green Channel records capture only transactions notified through that mechanism. Creeping acquisitions by corporate promoters, including gradual stake accumulation by a foreign acquirer, may fall outside CCI notification requirements altogether. Their absence from Green Channel records does not indicate a regulatory lapse, but highlights the limitations of relying on a single notification mechanism to assess cumulative ownership changes.
Making Cumulative Ownership More Visible
A formal data-sharing arrangement between SEBI and the CCI could help regulators identify successive acquisitions across years and connected entities. Integrating relevant ownership disclosures with competition-notification records would make it easier to assess changes in control and determine whether cumulative patterns warrant closer examination.
A periodic review of the Competition (Criteria for Exemption of Combinations) Rules, 2024, which exempt specified transactions from notification subject to conditions, including certain intra-group acquisitions and further share acquisitions that do not change control, could assess whether the exemptions remain appropriate in sectors dominated by a small number of business groups.
The Ministry of Corporate Affairs could also examine whether differences in disclosure, approval and notification requirements influence firms’ choices between intra-group transfers, mergers and outside acquisitions.
The objective is not to subject every incremental acquisition to competition review, but to enable better-informed scrutiny of cumulative ownership changes. Greater visibility would not, by itself, establish harm to competition or minority shareholders.