Citigroup expects that Indian firms could raise up to $20 billion through initial public offerings (IPOs) over the next year, driven by an active pipeline and improving equity market conditions.
The forecast underscores growing confidence in India’s capital markets, as regulatory reforms and strong valuations encourage more companies to list.
Drivers Behind the Surge
India’s relatively under-penetrated IPO market stands to benefit from several catalysts. First, regulatory changes are streamlining the listing process and easing capital requirements, making public market entry more accessible for mid-to large-cap firms.
Second, robust investor appetite – especially from domestic institutional funds – is pushing valuations higher and increasing the feasibility of new offerings.
Third, several high-profile companies and subsidiaries of global firms are preparing to tap public markets, adding heft to the overall issuance potential. Banks and advisors also view the momentum as a chance to expand deal pipelines, which have already gathered traction in recent quarters.
Implications, Risks & Outlook
If the $20 billion mark is reached, India could solidify its status as a leading global IPO destination, just behind the U.S. That would attract more international capital and boost the country’s financial infrastructure.
For investors, successful IPOs may offer fresh alpha opportunities. However, valuations could be stretched, and listing-day volatility may challenge newer issues. Unlike mature markets, the Indian IPO space often experiences sharp gains or reversals immediately post-listing.
Risks include macroeconomic pressures, interest rate hikes, and regulatory reversals. Companies may also delay listings if conditions weaken. Additionally, competition among issuers could compress deal terms, affecting returns and structure.
Overall, the next year in India’s equity capital markets may see an influx of new names, bigger floats, and more aggressive pricing – especially if momentum sustains.
