India's IPO market expected to hit fresh records despite challenges: Citi

By Baiju Kalesh, Rajesh Mascarenhas and Ashutosh Joshi

 

Initial public offerings in India should get back on track in the second half of the year, according to Citigroup Inc., moving on from a rocky start that’s seen foreign investors withdraw capital and the rupee slide. 

A lot rests on a potential Indian record-breaking first-time share sale by Jio Platforms Ltd., which is proving increasingly challenging, as well as National Stock Exchange of India Ltd.’s long-delayed listing. About $3.5 billion has been raised in IPOs in India this year, compared with $22.4 billion in all of 2025, when it was the world’s third-biggest IPO market.

 

 

“Over the past two years, 60 per cent–70 per cent of issuance has been concentrated in the final quarter, and current conditions suggest a similar trajectory,” said Arvind Vashistha, Citigroup’s India head of equity capital markets. 

  “There remains a long runway for deal execution, with full-year volumes likely to be at least in line with last year and potentially 5 per cent or 10 per cent higher,” Mumbai-based Vashistha said. 

For foreign investors looking at India, interesting themes include the country’s positioning in artificial intelligence and its impact on employment and consumption, according to Vashistha. While these factors will shape capital flows, they won’t derail issuance activity, he said. 

 

India M&A 

Citigroup’s India head of investment banking, Rahul Saraf, said more deals should emerge as multinationals reassess portfolios and divest non-core assets. Recent examples include Novartis AG selling a majority stake in its Indian unit in February, FMC Corp. offloading its local business, and Paris airport operator ADP selling a stake in GMR Airports Ltd. 

 

On the outbound front, “India is increasingly a natural buyer,” Saraf said. “Indian companies retain both the capacity and the willingness to pursue large, strategic acquisitions—particularly where there is a clear industrial rationale such as geographic expansion, capability building, or cost optimization.” 

 

An example is Sun Pharmaceutical Industries Ltd. agreeing to acquire New York-listed women’s healthcare company Organon & Co. at an enterprise valuation of $11.75 billion, one of the biggest overseas deals by an Indian company. 

 

There are of course challenges, not least stemming from the war in the Middle East and its impact on prices, disruption to business and the global economy. India has been taking some extreme measures to cushion itself, including tightening gold imports, banning sugar exports, telling some people to work from home to save fuel, and proposing tax cuts. 

 

India is the world’s third-largest importer of oil and heavily reliant on energy supplies through the Strait of Hormuz, which has essentially been blocked for more than two months. An increase in energy bills has led to a surge in foreign outflows and put pressure on the rupee, which has hit a record low. The country’s Sensex stock index is also down 11 per cent this year.  

 

The uncertainty has widened the gap between buyer and seller expectations on deals, according to Saraf. 

 

“Deals are not disappearing, but they are becoming more selective, with greater scrutiny on valuation, diligence, and downside protection,” Saraf said. Still, while “markets have softened in the short term, the broader expectation is for stabilization and recovery,” he added.