From mega M&As to aggressive expansion, 2025 was the year of Indian conglomerates. Will the momentum sustain in 2026?

The upbeat outlook at these conglomerates–Adani Group, Reliance Industries, Tata Group, Aditya Birla Group, JSW Group, and L&T, to name some–stretches into the new year, as they indicate no abatement in their expansion plans and deftly take disruptions like the US’ tariffs in their stride.

They will have to be, however, mindful of not overleveraging themselves in their diversification drive and plan succession well for longevity, experts warned.

At the company's annual general meeting late in August 2025, Reliance Industries chairman Mukesh Ambani spoke of his company's growth trajectory — one which echoes in other large business houses, too. "In just one generation, Reliance has transformed itself from a Fortune 1000 company to a Fortune 40 global powerhouse, creating over $200 billion in value – all within India," Ambani said. "But the best of Reliance is yet to come. In 2022, I made a promise that we will double Reliance by the end of our Golden Decade. At that time, our Ebitda was about ₹1.25 lakh crore ($ 14.6 billion). I reiterate that Reliance will more than double its Ebitda by the end of its Golden Decade in 2027." Ebitda, short for earnings before interest, tax, depreciation, and amortization, reprsents the operational profitability of a company.

Acquisition spree

A major theme of the year gone by was M&As at India’s top business houses to power inorganic expansion in their existing lines or diversifying into new segments altogether.

The former category includes Tata Motors’s acquisition of Italian commercial vehicles maker Iveco for about ₹40,000 crore and JSW Paints’s buyout of AkzoNobel India for just under ₹13,000 crore. The deals overnight scaled operations at both these companies. Tata Motors became one of the largest commercial vehicles makers in the world, while JSW Paints modest business suddenly got a seat at the table of India’s largest paintmakers.

JSW Energy was also on an spending spree in 2025 buying thermal power assets of KSK Mahanadi and renewable energy companies O2 Power and Hetero Group, bulking up its portfolio to over 13 gigawatts of operational capacity with a strong development pipeline—transforming into one of the larger private power producers in the country.

Other headline acquisitions included Reliance Consumer buying Udhaiyams Agro Foods and Kelvinator brands and Adani acquiring Vidarbha Industries Power Ltd in Maharashtra and Abbot Point Port in Australia, as also scooping up Jaiprakash Associates Ltd at the last minute from Indian bankruptcy courts.

Similarly, Mahindra Group acquired a controlling stake in light and medium commercial vehicles maker SML Isuzu in India to widen its product portfolio.

Organic expansion, diversification

Perhaps even more impressive was the money plunked down by Indian conglomerates into capital expenditure to scale up their existing businesses.

The Adani Group is undertaking one of the highest corporate sector capex in a year in India, with a target of spending a record ₹1.5 trillion in FY26 across its listed companies. The money is going into investments in renewable energy plants, new airports, ports, data centres, cement factories, copper smelter, thermal power plants, transmission lines, and battery storage units.

Last month group chairman Gautam Adani was unabashed when he said: "In the years ahead, our commitment to mining and materials will significantly expand from extracting various ores to making metals, alloys and finished products that power our economy, electrify mobility and enable our nation's green transition." He was delivering a speech at Indian Institute of Technology Dhanbad on 9 December. Earlier, in a message to shareholders of flagship Adani Enterprises, he toted up the group capital expenditure over the next five years: $15-20 billion.

A similar-scale capital expenditure is on at Reliance Industries, too, with mega investments in an integrated renewable energy complex at Jamnagar that is to make everything from solar cells to renewable electricity and then run data centres and green hydrogen units using this clean power.

In fact, investments in data centres was a recurrent theme at other conglomerates such as L&T and the Tata Group through Tata Consultancy Services.

The Aditya Birla Group continued its capex into expanding its cement, aluminium, copper, and paints businesses, while Reliance has earmarked a significant expenditure for its consumer goods businesses.

What’s powering the conglomerates?

The agility shown by large businesses in grabbing new opportunities while also adjusting to external uncertainty went against the wisdom of less than a decade ago, when conglomerates were written off as cumbersome beasts weighed down by inertia in a rapidly changing world.

Saptarshi Purkayastha, professor of strategic management at the Indian Institute of Management Calcutta called 2025 a great year for the conglomerates. “While standalone businesses, particularly in the tech and startup ecosystem, grappled with funding problems and valuation corrections, Indian conglomerates like Tata, Reliance, and Adani leveraged their robust internal capital to surge ahead," he said.

In a study, Purkayastha and his collaborators found that conglomerates earned 6 to 8 per cent higher returns on assets on average than stand-alone firms. The high cash flows from their mainstay businesses helped subsidize their investments in new sectors, he said.

Size and nimbleness are not mutually exclusive, another expert said on the moves by the conglomerates. “These giants leveraged deep pockets and multi-sector reach to dominate transformative deals across banking, retail, media, energy, and cement," said Deepankar Sanwalka, senior partner at consultancy Grant Thornton Bharat.

“The message is clear: diversification worked. Conglomerates didn’t just survive, they thrived, proving that scale and agility can deliver growth and innovation," he said.

The conglomerate structure thrived in India even as it declined in developed economies because efficient capital markets and other pro-market institutions in the latter penalize the complexity of a conglomerate with a discount, Purkayastha said. In developed economies, investors prefer to diversify their own portfolios rather than pay a conglomerate to do it for them. This is due to less information asymmetry between investors and managers, he said.

In contrast, in India, large conglomerates act as intermediaries that utilize their own internal capital, labour, and reliable infrastructure with better efficiency in an environment where the external market is more likely to be inefficient.

Quasi national champions

“The primary strength of Indian conglomerates is what I term as the 'strategic alignment' with the external stakeholders, primarily the government. Indian conglomerates have their corporate strategies aligned with the country's national priorities, for example, oil security (Adani/Reliance), infrastructure building (L&T), or digital sovereignty (Tata/Jio)," Purkayastha said.

Secondly, these conglomerates are capitalizing on the slowing of global growth by selling India's growth story to foreign investors. This has given them access to the global debt markets, thereby bypassing domestic liquidity constraints, the IIMC professor said.

The scale of these conglomerates also helps attract strategic foreign partners for new businesses. Like Tata Electronics and PSMC tying up for semiconductors, Reliance and NVIDIA for AI infrastructure, or JSW Group and SAIC for electric vehicles. This helps conglomerates gain access to technology and other proprietary knowledge, which may be nearly impossible for standalone firms, Purkayastha said.

Given these reasons, the growth momentum of India’s top conglomerates is expected to carry into 2026 and the medium term, according to both Purkayastha and Sanwalka.

Yet, these business groups must be mindful of prudent capital allocation, they warned.

“When cash is lying idle, the discipline to avoid diversification into unrelated areas is a major concern," Purkayastha said.

Sanwalka counted managing these diversified businesses without losing agility, keeping debt under control, and ensuring transparent governance as the key challenges for conglomerates in 2026 and the years after.

Lastly, most Indian conglomerates are family-run businesses barring exceptions like L&T. Succession planning remains a critical vulnerability for family-controlled conglomerates, the Purkayastha said.