Saraf said the second half of the financial year could see stronger activity, similar to the trend seen in 2024 and 2025. He expects overall capital market activity for the year to potentially exceed last year’s levels, while the pipeline for the next year also remains encouraging.
“As we saw in 2024 and 2025, the second half was busier than the first half, and there’s no specific seasonality here. It is just different circumstances each year, so the level of activity is fairly strong,” Saraf said.
The IPO market has seen a sharp pickup after a relatively weak start to FY27. Saraf said there is no shortage of companies looking to access the capital markets, with activity spread across sectors.
Capital formation is spanning multiple sectors. Beyond a slew of jewellery makers, companies entering the market include industrial gas businesses, global entities like Carlsberg, and Jio, which has already filed its draft papers.
Broader themes attracting market interest include energy, infrastructure, enterprise tech, healthcare, lifesciences, and consumption.
Manufacturing, encompassing both high-end and baseline operations, is expected to see substantial growth over the next several years, allowing companies to access markets to bolster their capital structures.
Larger M&A deals gaining momentum
On the M&A front, Saraf said larger transactions are becoming more active as buyers and sellers focus on strategic opportunities.
Deals worth more than $100 million have seen an increase in activity, while smaller transactions are taking longer as participants wait for greater stability. According to Saraf, larger deals are being driven by clear strategic objectives, including access to technology, products and new geographies.
“The bigger deal size is fairly active. You’re seeing the private equity deal sizes have gone up 20-25% this year, and a lot of dry powder is waiting for that investment from private equity.”
India’s outbound M&A activity has also picked up significantly after remaining relatively subdued for several years. Saraf expects this trend to continue over the next 12-24 months.
Cross-border partnerships are also forming, with German and Chinese companies collaborating with large Indian conglomerates to combine global technology and products with local manufacturing know-how.
Inbound manufacturing remains crucial for fulfilling global supply chain needs, particularly in chemicals, basic manufacturing, and electrical equipment. Healthcare and lifesciences are highly active, while the pharma sector is likely to see smaller outbound deals following the large Sun Pharma-Organon transaction.
Corporate reorganisations are further fuelling dealmaking and capital market activity. The $25 billion Vedanta demerger exemplifies this trend, aiming to create a more selective and accountable approach for each distinct business unit.
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