Long dominated by the Big 4s -- EY, KPMG, Deloitte, and PwC -- the Indian audit space is seeing a shift with firms like Grant Thornton (GT) and BDO rapidly expanding their market share in terms of the number of companies they audit.
The shift has been triggered by the mandatory regulatory requirements to change auditors every five years.
According to the primeinfobase.com 2024-25 report, these firms are now key players in the "Big 6," collectively auditing 67% of Nifty-500 companies and 34% of all NSE-listed firms.
Grant Thornton, which is placed fourth, saw a 12.5% increase in the number of companies it audits to 107 in 2024-25, up from 95 in the previous year.
BDO, which is ranked fifth and is placed above PwC, recorded the highest growth rate among the Big 6, jumping 30% YoY to audit 78 companies (up from 60). By contrast, the Big 4’s growth was more subdued. For instance, EY grew by 6% (166 to 176), while PwC grew by 7.8% (64 to 69).
However, in terms of audit fee, the Big 4s -- EY, KPMG, Deloitte, and PwC -- maintained their dominance by cornering 29% of the total audit fee of Rs 1,903 crore in 2023-24.
However, Grant Thornton recorded a 23% increase in audit fee to ₹69.63 crore in 2023-24, outpacing PwC’s 13.6% growth. BDO also saw a sharp 38% increase in audit fee earnings to Rs 30.06 crore, signalling its appeal to mid-market clients.
The key driver for growth of audit firms beyond the Big 4 are mandatory audit rotation. The Companies Act, 2013 prescribes that an individual auditor should not be appointed or re-appointed for more than one term of five consecutive years, and an Audit Firm should not be appointed or re-appointed for more than two terms of five consecutive years in listed companies.
According to Primeinfobase, auditor changes were seen in 341 companies from 2023-24 to 2024-25 (out of 1,951 NSE-listed companies, where auditor details were available for both 2023-24 and 2024-25).
Going forward, tenures of 248 auditors in 242 companies are set to expire in 2025-26, a huge 986 auditors in 957 companies in 2026-27, 252 auditors in 247 companies in 2027-28 and 272 auditors in 267 companies in 2028-29, says a Primeinfobase.