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Are there too many people doing M&A already? It seems as if every other person from my batch wants to do M&A and I am concerned whether there is even enough space, considering I am not from a T1 NLU and people don't really get an option of choosing one's practice area during placements despite having a well directed CV. Does having an M&A oriented CV hinder my chances of getting the field ultimately?
Nope, the work in most of the corporate teams including M&A, B&F, etc., is more about structure and management than it is about law (take it with a pinch of salt please, just get what I am trying to say).

You having a well defined M&A oriented CV will not hinder your way to some other practice area, rather it will show the recruiters that you are well aware about the structure and management of one of the most complex corporate transactions. You can be easily molded to participate in other practice areas.