Kotak Investment Banking projected a bustling year for India’s capital markets, foreseeing a potential record-breaking performance surpassing 2021. Managing Director and CEO S Ramesh expressed optimism, highlighting the expectation of approximately $50 billion (₹4.15 lakh crore) being raised through equity issuances and deals.
Ramesh emphasized that the primary market, particularly driven by new-age tech companies, is poised for significant activity. The overall funding market is anticipated to witness an inflow of $50 billion, with domestic funds having injected $25.8 billion in 2023, expected to potentially double this year.
V Jayasankar, a Managing Director at Kotak, anticipated a surge in large Initial Public Offerings (IPOs) throughout the year. Despite potential election-related volatility, analysts believe that any impact on primary market activities will be short-lived, typically resolving within two to three months.
In 2023, India witnessed a notable 59 IPOs, raising close to ₹53,000 crore from the main board. The collective value made Dalal Street the world’s fourth-largest market in terms of funds raised, following the US, China, and Japan. The Nifty’s one-year forward premium, currently at a record high of 20.1x, further instills confidence, exceeding the average among emerging markets.
Bankers pointed out that strategic diversification of fundraising efforts by corporates, combining debt and equity, is becoming increasingly prevalent. This trend is attributed to a desire for investment opportunities and value creation, with promoter families displaying a willingness to cede control.
The report also highlighted a significant uptick in buyouts, totaling USD 55 billion between 2019 and 2023, surpassing the combined value of the preceding 15 years. Analysts attribute this surge to an increasing openness among promoter families to relinquish control for the sake of value creation.
In a promising outlook, the domestic market is expected to welcome approximately 20 unicorns over the next two years, attracting an estimated USD 10 billion in investments. This robust growth trajectory underscores the resilience and attractiveness of India’s capital markets on the global stage.
