India comes of age in M&A, but not always smooth

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companies also have corrected," Subramanian said.

"Plus, Indian companies have generally tended to be conservative, as the founders still hold a significant stake. Any decline in share prices will affect them, so they tend not to overpay for an asset," he said.

Once fiercely possessive about their holdings and control of their companies, the current environment is forcing Indian companies to consider alternative sources of capital which may include a stake dilution and/or management participation.

Vehicle maker Mahindra & Mahindra for the first time teamed up with a buyout firm, Apollo Partners, to bid for Jaguar and Land Rover, and recently concluded the acquisition of an Italian gear maker with private equity firm ICICI Ventures.

It is also raising about $170 million from a private placement with a Goldman Sachs unit that will give the US investment bank a 3.7 percent holding in Mahindra.

"The credit crunch is squeezing small and mid-sized firms, but it is throwing up new opportunities for larger companies like us," Vice Chairman Anand Mahindra told Reuters recently.

"We are also discovering new sources of capital, and private equity brings management expertise and networks. So these are definitely going to be options for us going forward."

But analysts caution against rushing head-long into an acquisition spree simply because there are assets to be had, at a time when growing competition, high inflation, rising commodity costs and softer demand are pressuring margins.

"Clearly, if (Bharti's Sunil) Mittal wants to play in the big league, he has to do a big deal," said Rishi Sahay, director of IndusView Advisors.

"But it's not just about having the money to pull it off. Everyone wants to do a Tata-type deal and plant a flag in an overseas market, without considering if they have the experience and management expertise for it," he said.