India’s equity capital market volumes to see heightened activity next year, Citi Group says
India's equity capital market volumes are anticipated to exceed the current level of $46 billion next year, according to top Citi Group executives.
MUMBAI : India’s equity capital market volumes are expected to increase next year from the current level that stands at $46 billion, top Citi Group executives told Mint.
“We have already done close to $15 billion of IPOs since the beginning of 2025, and we have a few more in the pipeline. I think this year the volumes have largely increased, and the sizes have been bigger," Arvind Vashistha, head of Citi India’s equity capital markets, told Mint. He added that Indian companies could raise over $20 billion through initial public offerings (IPOs) by the end of this year.
“We are seeing IPOs of different sizes and scales from companies across sectors, including financials & fintech, infrastructure and healthcare, come to market, and that is keeping the public market activity steady. There’s still a lot more to happen in November and December, and we expect it to remain a busy period," added Rahul Saraf, Citi India’s head of investment banking. He further said that the firm is seeing more instances of private equity-backed firms exploring IPOs.
- India’s Equity Capital Market volumes are expected to exceed $46 billion next year, suggesting a significant increase in capital raising activity.
- The IPO market is the main driver and is expected to generate over $20 billion by the year end.
- The current IPO pipeline consists of a high-quality, diverse set of companies that are described as being scaled and profitable.
- The activity is supported by rising domestic capital and global factors, like geopolitical issues prompting MNCs to list Indian subsidiaries for liquidity or debt paring.
- M&A is seeing a mix of foreign strategic inflow and increasing outbound acquisitions by Indian companies, who are taking advantage of their unlevered balance sheets and lower valuations in some international markets.
Some of the IPOs where Citi India was mandated include the listings of Tata Capital, LG Electronics India and Hexaware Technologies, among others. Its other anticipated IPOs for this year include Lenskart, Meesho, Groww and Pinelabs.
“There is a very high-quality pipeline of companies that want to go public, and as we come into the latter part of this year, we are seeing that the number of assets which are looking to tap for an IPO are reasonably scaled and profitable," Vashistha said. He also anticipates an increase in Qualified Institutional Placements (QIPs), which is a way for listed companies to raise capital, with higher average ticket sizes for firms to meet their growth ambitions.
The investment bank facilitated State Bank of India’s QIP, one of the largest transactions of this year. It was also involved in British American Tobacco’s stake sale in ITC.
Domestic capital
The increase in activity also comes on the back of rising domestic capital, fueled by higher retail investor participation coupled with a mix of geopolitical issues that have prompted many multinational companies to list their Indian subsidiaries to pare debt, reduce exposure and get some interim liquidity.
Saraf added that mergers and acquisitions have also seen differentiated strategies play out, with foreign strategic money coming into India even as global MNCs evaluate options for sale in some entities. “The deals we are seeing today don’t have one central theme. It has been purely on a case-to-case basis, and there have been varying sentiments across companies and sectors," he said, adding that the firm is also seeing more instances of “collaborations, partnerships, and alliances" with Indian companies.
Some of the prominent M&A transactions that Citi India was involved with include Akzo Nobel's sale to JSW Paints, SMBC’s acquisition of stake in Yes Bank, IHC's controlling stake acquisition in Sammaan Capital, the sale of Blackstone's minority stake in VFS Global to Temasek, UC Regents and others and Capgemini’s acquisition of WNS.
Indian companies are also more actively exploring acquisitions in different geographies to diversify their exposure and de-risk themselves on the back of the ongoing tariff war.
“Many of our Indian clients have an unlevered balance sheet, and there is a lot of liquidity in the system. This, coupled with a stable government and some international geographies having lower multiples and valuations, has made acquiring companies seem like an attractive option," Saraf said.
“It is also encouraging that there is a lot of capital available in India. Private equity firms are hungry, and they are keen to buy or pay a premium for a good asset," he said, adding that deals have also become more complex with domestic strategics also becoming more acquisitive in nature. “In recent times, we have also seen 2-3 situations when domestic strategics have taken a longer-term view and won against private equity."
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