Mumbai-based financial experts from Citi have shared a bullish outlook for India's capital markets. They predict a significant surge in equity fundraising through initial public offerings (IPOs) next year. The bank anticipates total IPO issuance could reach between $15 billion and $20 billion in 2026. This figure might match or even surpass previous records.
Strong Equity Market Fundamentals
Senior executives discussed these projections during a recent Citi capital markets outlook webinar. Rob Chan, who heads equity capital markets syndicate for Asia, expressed confidence in India's IPO landscape. He stated that the market will remain very strong in 2026. Several large transactions are expected to come to market, although specific names are not yet disclosed.
The optimism stems from solid earnings growth and macroeconomic stability. Kaustubh Kulkarni, co-head of investment banking for the Asia-Pacific region, highlighted this combination. He noted that strong equity markets and relatively stable currencies support healthy capital raising activities.
Historical Context and Domestic Support
India's IPO market demonstrated resilience in 2025. It raised approximately Rs 1.95 lakh crore across more than 360 issues. Major offerings included those from Tata Capital, HDB Financial Services, and LG Electronics. This robust activity reflected strong domestic participation, even as foreign investors sold off in secondary markets.
Debt Market Opportunities
On the debt side, Citi sees potential for increased offshore issuance. Regulatory changes could act as a key trigger. Nitesh Dugar, head of debt capital markets for South and Southeast Asia, pointed to proposed amendments in external commercial borrowing (ECB) guidelines.
If implemented, these draft proposals might open the bond market to a broader set of issuers. Sectors like real estate, historically constrained, could benefit significantly. This shift might lead to a sharp pickup in ECB activities.
Currency and Foreign Investment Dynamics
Dugar also commented on the Indian rupee, describing it as somewhat oversold. Tariff-related uncertainties have weighed on market sentiment. However, if this overhang lifts, the rupee could rebound sharply.
Regarding foreign portfolio investor (FPI) inflows, executives noted a cautious outlook. Net FPI inflows into equities are likely to turn decisively positive only if valuations remain attractive. Kaustubh Kulkarni added that more attractive secondary-market valuations and reduced foreign exposure could become important factors. Any reversal in these trends might reshape market dynamics in 2026.
Overall, Citi's analysis paints a picture of a vibrant capital market in India. Equity fundraising is set to thrive, while regulatory tweaks could unlock new debt opportunities. The interplay between domestic strength and foreign interest will be crucial in the coming year.
