India’s public markets are navigating a complicated mix of global and domestic challenges, but Jefferies’ Head of Equity Capital Markets, Jibi Jacob, sees encouraging signs for the rest of the year.
Tariffs, shifting investor flows, and secondary market volatility have tempered activity in recent months, but Jacob believes momentum is building toward a stronger finish to 2025. His advice to clients: stay ready.
Deal Sizes Rising, Investors Ready
India’s equity capital markets have grown in both scale and sophistication.1 Average deal sizes are climbing, and unlike many other regions, India offers unique flexibility for private equity firms seeking full exits.
“India’s markets now have the depth to take 100% PE-owned clients public and deliver full exits over time,” Jacob explained. “No other market really has the capacity to do that.”
This depth is reinforced by investors’ willingness to back issuances even when proceeds are secondary. In many markets, primary capital raises dominate. In India, large shareholder exits don’t deter demand. “Indian investors understand the lifecycle of PE firms,” Jacob noted. “Block trades aren’t viewed as a negative. This attitude really helps PE firms with price realization compared to private sales.”
That dynamic has supported an annual pipeline of more than $20 billion in secondary blocks, underscoring the strength of India’s domestic capital formation. Against this backdrop, Jacob expects 2025 to bring the largest wave yet of billion-dollar IPOs — seven or more compared to just three in 2024. A long list of multinational subsidiaries (Hyundai’s record $3 billion listing in 2024 being the benchmark) are preparing to test the waters.2 “The outlook is very encouraging,” he said.
Foreign Flows: At a Turning Point?
Foreign ownership of Indian equities is at its lowest level in a decade, and the MSCI India Index has lagged broader emerging markets by nearly 25%.3 Jacob, however, thinks the trough may be behind us.
“From a growth perspective, India is always a bright spot in emerging markets,” he said. “The market is a bit expensive, but it will stay that way as long as growth expectations remain strong.”
If in U.S., rate cuts begin which is what the street is expecting, Jacob believes foreign flows could return more meaningfully as investors chase better returns. Larger deal sizes also help. “India would have always had an EM allocation before, but now the same funds who have experience in India are getting their global funds to participate because there is a wider level of liquidity than ever before,” he added.
Tariffs and Global Headwinds
“There’s no question tariffs are an overhang,” Jacob acknowledged. “The longer they last, the greater the potential hit to growth. But they may also accelerate the push for domestic consumption, labour reforms and tax changes, much like the economic reforms of the early 1990s.”
Prime Minister Narendra Modi has already cut taxes to cushion the impact.
Staying Ready: Lessons from 2022
For companies preparing to go public, Jacob recommends they not wait too long.
“We remind clients of 2022. 2021 was one of the best years ever. Naturally we thought 2022 would be a rock-solid year as well, but Russia invaded Ukraine, and the markets tapered down globally. In 2021, we had 12 straight months of IPOs. In 2022, two or three months accounted for 60% of the volume,” he said. “Windows open and close quickly. Since it takes six to nine months to list from a standing start, readiness is everything.”
Jefferies is urging issuers to be prepared to move. “Don’t get distracted by the noise,” Jacob advised. “As long as the structural story for Indian equities is intact, the market will give you opportunities, but you need to be in position when the window comes.”
The upcoming festive season, running from September through year-end, could provide a tailwind. “Diwali lifts everyone’s spirits. We expect to see a strong deal calendar, with IPOs every month if not more,” he added. Jefferies has already led 12 IPOs in the last 12 months, raising $7.6 billion for clients.
Sector Trends: Beyond Tech and Consumer
India’s IPO market remains one of the most diversified globally, with strong activity across multiple industries. Jacob sees financial services, technology, and healthcare as the leading fundraising sectors for 2025, with industrials beginning to emerge as well.
“India isn’t just a one- or two-sector market story,” he said. “Investors have appetite across the spectrum, and that makes the market more resilient over time.”
Looking Ahead
Macroeconomic uncertainty, from tariffs to shifting U.S. economic momentum, will continue to shape India’s equity capital markets in the months ahead. But Jacob believes the fundamentals remain supportive.
“With valuations closer to long-term averages, large issuances in the pipeline, and secondary markets showing signs of stabilization, the setup for a stronger finish to 2025 is in place,” he said. “Our message to clients is simple: be ready.”
- https://www.jefferies.com/insights/the-big-picture/what-will-drive-indias-growth-for-the-next-20-years/ ↩︎
- https://www.hyundai.com/worldwide/en/newsroom/detail/hyundai-motor-india-makes-history-with-indiaE28099s-largest-ipo-and-plans-to-expand-investment-and-localize-ev-supply-network-0000000853 ↩︎
- https://www.google.com/search?q=msci+india+index&oq=msci+india+index&gs_lcrp=EgZjaHJvbWUyBggAEEUYOdIBCDE5NDJqMGo3qAIAsAIA&sourceid=chrome&ie=UTF-8 ↩︎
