Deals & disputes drive India Inc legal spends up by 17% in FY24; RIL & Sun Pharma top spenders

Mumbai: Legal expenses of India Inc rose 17% in the last fiscal due to robust deal activities beyond home shores, heavy spending on dispute resolution, and increased compliance costs, showed the annual reports of the top 500 companies listed locally.

The Nifty 500 companies spent ₹52,568 crore ($6.26 billion) in legal expenses for the year ended March 2024, up 17.03% from ₹44,920 crore in the previous year, data compiled by ETIG show.

The top 50 companies by market capitalisation have a lion's share in the total legal expenses of the Nifty 500 companies. The data reveals that legal spending rose about 17.40% to ₹21,389 crore in Nifty 50 companies.


Organic and inorganic expansions beyond home, regulatory expenses, and costly litigations and arbitrations are the primary reasons for the rising overhead.

"The cost of non-compliance has gone up significantly and hence most companies are trying to spend on compliance and other regulatory, which generally goes in the bucket of 'legal spend' for several listed companies," said Nishith Dhruva, managing partner of law firm MDP & Legal. "It's a sign of a maturing market and one may see this cost going up continuously."

These legal expenses include spending on litigation and arbitration, professional fees, regulatory filings, penalties, and general stamp duty among others.

The top five spenders in terms of legal costs in FY23 were Reliance Industries (₹3,286 crore), Sun Pharmaceutical Industries (₹2,953 crore), Infosys (₹1,726 crore), Larsen & Toubro (₹1,550 crore) and Samvardhana Motherson International (₹1,287 crore).

Rajiv Choubey, group general counsel at Dalmia Bharat Group, noted that the uptick in spending corresponds with the surge in M&A and deal-making activity within India.

"When compared to other global economies, the Indian economy is experiencing a decent growth of 7-8%, with a promising upward trajectory. Several factors are currently aligning in India's favour, driving strong interest in foreign direct investment and other capital inflows" adds Choubey. "The deal activity in the cement sector is one such example. The legal expenditure of unlisted companies is expected to go up as they are coming up with IPO and increased compliance costs," he adds.

The top five sectors in terms of legal spending include infotech (₹9,901 crore), pharmaceutical (₹9,496 crore), finance (₹5,110 crore), capital goods (₹4,321 crore) and oil & gas (₹4,065 crore).

Ruchi Khatlawala Pandya, a partner at law firm Little & Co, said several groups and companies are investing in capacity building for traditional sectors such as steel, cement and power and at the same time, companies are also entering into new sectors such as renewable energy, semiconductors, electric vehicle (EV) and its peripheral industries.

"From an in-house legal standpoint, there's a significant push towards curbing legal expenses and achieving better fee negotiations and even adoption to legal tech, mediation and settlements," Choubey remarked.

The total legal spending of all the listed companies on Indian bourses may sound big, but it is minuscule at just 0.40% of their total revenue and 0.53% of their total expenditure.

As per data compiled by ETIG, the research and analysis division of ET, the revenue of all listed companies in FY24 totalled ₹1,55,09,188 crore, up 8.11% from ₹1,43,46,224 crore the year before. Their total expenditure, too, rose over 3.45% to ₹1,21,56,469 crore in FY24 from ₹1,17,51,310 crore in the previous year.