Indian corporate sector hit with ₹62,100cr legal bill in FY25
What's the story
India's corporate sector witnessed a massive 11% jump in legal costs, which soared to ₹62,146 crore ($7.27 billion) in the last fiscal year. The spike is largely due to increased overseas deal activity, heavy spending on dispute resolution, and rising compliance costs. Reliance Industries, Sun Pharmaceutical Industries, Coforge, Infosys, and Larsen & Toubro (L&T) topped the list of highest spenders during this period.
Rising expenses
Top 50 Nifty companies accounted for major legal costs
The top 50 companies by market capitalization in the Nifty 500 index accounted for a major chunk of the total legal costs. These firms saw their legal expenses rise by 10% to ₹20,640 crore in FY25. Anand Desai, managing partner at DSK Legal, predicted that these costs will keep rising until technology like AI is effectively utilized in this space.
Spending breakdown
Top 5 legal spenders in FY25
Among the top five legal spenders in FY25, Reliance Industries led with ₹3,459 crore. They were followed by Sun Pharmaceutical (₹3,261 crore), Coforge (₹1,664 crore), Infosys (₹1,655 crore), and L&T (₹1,615 crore). Legal costs usually cover litigation and arbitration expenses as well as professional fees, regulatory filings, penalties, general stamp duty, etc.
Market maturity
M&A deal activity, litigation driving up costs
Hemant Kumar, Group General Counsel at L&T Group, attributed the rise in legal costs to strong M&A and other deal-making activity outside India. He said companies incurred huge costs related to litigation and arbitration processes. Kumar also noted that the growing focus on compliance and avoiding non-compliance has significantly increased legal spending, indicating a maturing market where businesses are recognizing these areas as strategic investments.
Sectoral analysis
Top 5 sectors with highest legal spending
The top five sectors with the highest legal spending were pharmaceuticals (₹10,776 crore), information technology (₹9,520 crore), finance (₹4,625 crore), oil and gas (₹4,126 crore), and capital goods (₹3,870 crore). Sujjain Talwar from Economic Laws Practice said legal expenses are an unavoidable cost of doing business amid rising regulatory complexity, litigation risks, and corporate transaction growth.
Revenue ratio
Legal spending vs total revenue and profits
The total legal spending by Nifty 500 companies may seem huge, but it only accounted for a small 0.39% of their total revenues in FY25. The total revenue for these companies stood at ₹1,57,13,552 crore, reflecting a 6.90% increase from the previous year's ₹1,46,99,064 crore. Total profits also grew by 10.4% to ₹15,66,345 crore in FY25.