India: A Capital Markets (Expertise Based Abroad) Overview

India’s Equity Capital Markets: Momentum and the Road Ahead

Introduction

India continues to be one of the fastest-growing economies in the world, and equity capital markets (ECM) deal activity has hit all-time high levels in the last few years. Based on the EY Global IPO Trends 2025 report, India was the most active listing destination in the world by deal count in 2025, registering 367 initial public offerings (IPOs) and raising approximately USD22.9 billion, underpinned by deep domestic investor participation and a strong flow of small and medium enterprise listings. Moreover, 154 companies completed their IPOs in fiscal 2026, the highest tally in over two and a half decades, according to Prime Database.

As global markets continue to shift at present amid geopolitical tensions, the Indian markets have remained cautiously resilient.

Main drivers for India’s ECM

The momentum in Indian IPOs in the last few years can be attributed to several key factors:

• Equity offerings are a more attractive option for companies seeking growth capital amidst the prevailing cost of debt financing. A buoyant public market environment has enabled issuers to access capital at valuations that compare favourably with alternative sources of financing.
• The most significant structural shift has been the deepening of India’s domestic investor base. Indian mutual funds and insurance companies, together with the growth of systematic investment plans, have resulted in steady retail inflows into equity markets, creating a more self-sustaining market less dependent on global capital flows.
• Private equity (PE) exits are driving several IPOs. A wave of PE-backed IPOs has been a defining feature of the Indian market, as funds that have invested in unlisted Indian companies over the past decade are now at the stage of their investment cycle where they are evaluating partial or full exits.
• Monetising the Indian operations of multinational corporations is also a key factor since the Indian operations of various overseas groups have reached a size and scale where they can now be listed. In many of these situations, the overseas holding company typically participates as a selling shareholder.
• The domestic political landscape has remained broadly stable, with a predictable policy direction from the incumbent government. This political stability and continuity in policy over several years has reinforced investor confidence in the country’s markets.
• Another key factor is the China +1 strategy, where many international corporations have diversified their investment and supply chain strategies beyond China, leading to increased interest in India as an alternative investment destination.
• There has also been a trend of issuers (especially tech unicorns) moving away from US listings and redomiciling their US or Singapore holding companies in India to be able to list in India. Tax considerations are key to these redomiciliation exercises, but these groups remain keen to list in India due to stronger valuations in the Indian public markets.

Regulatory landscape: key considerations

There are certain key considerations that issuers should be aware of before considering an IPO.

• Regulatory Rigour: The Securities and Exchange Board of India (SEBI), the Indian securities regulator, along with the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE), are known for stringent oversight and this has only deepened as the markets have boomed. Issuers should expect a thorough review process: in certain recent filings, regulators have issued several rounds of comments, including over 100 “observations”, particularly in relation to business, financial presentation, risk factors, litigation, governance and non-GAAP measures.
• Promoter Identification: The concepts of “promoter” and “promoter group” are somewhat unique to India (the closest analogy in other jurisdictions would be the concept of persons in control) and SEBI places specific disclosure requirements and ongoing post-listing obligations on these entities. For international groups with complex ownership structures, promoter identification and the resulting implications for matters such as disclosure, share lock-in periods and compliance warrant early consideration.
• Financial Presentation (Including Pro Formas and Non-GAAP Measures): SEBI pays close attention to financial presentation and the inclusion of pro forma financial information (the Indian tests under the SEBI regulations vary somewhat from the Regulation S-X tests, and occasionally only one set of tests is triggered) and the use of non-GAAP measures.
• Pro Forma Financials: For acquisitive companies (such as tech unicorns) that are making or planning to make material acquisitions, it is prudent to be aware of the Indian and S-X tests as these often result in lengthy discussions and negotiations with the issuer’s auditors.
• Non-GAAP Measures: SEBI has significantly increased its focus on non-GAAP measures over the past few years by introducing a regulatory framework for mandatory disclosure of key performance indicators (KPIs). All KPIs disclosed to any investors in the three years before an IPO must be included in the offer document with comprehensive explanations around how KPIs have been historically used by the management to analyse or track the operational and financial performance of the issuer. Each KPI must be approved by the issuer’s audit committee.
• Corporate Governance Requirements: Indian listing regulations prescribe detailed board and committee composition requirements, which have implications for the day-to-day operations of an issuer post-listing. An Indian-listed company is required to have at least six directors, including a woman independent director, and not less than 50% of the board must comprise non-executive directors. Further, at least half (if the chairperson of the board is an executive director) or one-third (if the chairperson of the board is a non-executive director) of the board must consist of independent directors.
• Special Rights: Any special rights granted to promoters, investors (including PE investors), or other shareholders in the articles of association must fall away at listing. Certain rights such as quorum and information rights may be negotiated to lapse at earlier stages of the IPO process.

The way ahead

The diversity of companies listing in India is itself telling, ranging from tech unicorns in e-commerce, payment and fintech to established companies in healthcare, pharmaceuticals, contract research, automobile manufacturing, finance, energy, industrial technology, hospitality, electric vehicles and consumer goods. This breadth of sectors reflects broad-based confidence in India’s growth trajectory, with the pipeline of PE-backed exits remaining substantial and overseas conglomerates continuing to evaluate carve-out listings of their Indian operations.

India’s capital markets infrastructure has also matured considerably. The depth of domestic institutional and retail participation also provides issuers with a diversified and increasingly sophisticated home-grown investor base. The regulatory framework, while demanding, has for the most part reinforced investor confidence. For companies with operations in India, or those contemplating entry into the Indian market, the question is no longer whether the opportunity is real, but how best to position for it.