Nomura forecasts robust equity market activity in India for the rest of 2026, with Qualified Institutional Placements (QIPs) and block deals outpacing traditional IPOs. Driven by nearly $10 billion in August deals, this shift highlights strong institutional appetite and global private equity interest. Investors should track these secondary market trends as they indicate how companies manage capital and exit strategies.
Nomura's investment banking arm expects India’s equity capital markets to remain busy for the remainder of 2026, marking a notable shift in how companies raise capital. While Initial Public Offerings (IPOs) usually grab headlines, the firm notes that Qualified Institutional Placements (QIPs) and block deals are currently becoming the preferred route for raising funds and offloading stakes. This trend has been reflected in market activity, with nearly $10 billion in deals priced in August 2026 alone.
Why QIPs and Block Deals are Leading
The move toward QIPs and block deals is driven by both speed and efficiency. Companies that are already listed often find it faster to raise additional funds through QIPs compared to the lengthy regulatory process required for a fresh public offering. At the same time, institutional investors—such as mutual funds and insurance companies—are showing high demand for these placements. For global private equity firms, block deals have become an effective way to monetize their investments in companies that have already reached a certain scale and maturity. Instead of waiting for an IPO exit, these funds are increasingly utilizing the secondary market to provide liquidity to their portfolios.
Global Interest and Sector Focus
Global buyout funds, which hold significant amounts of capital ready for deployment, are actively looking at India as a primary destination for expansion. This interest is not limited to one area but covers a broad range of sectors. Nomura remains optimistic about industries including financials, consumer goods, healthcare, and infrastructure. Additionally, the firm is observing growing interest in sunrise sectors like defense, aerospace, and semiconductors, where global companies are scouting for manufacturing and sourcing bases. There is also a distinct trend of family-owned businesses looking to bring in private capital before they eventually approach public markets, indicating a maturing ecosystem.
Risks for Investors to Track
While the current deal momentum is strong, the market is not without pressure points. The pace of these deals could be affected by global macroeconomic changes, including shifts in currency values and geopolitical tensions. Market volatility, often measured by the India Volatility Index (VIX), remains a factor; if the VIX climbs too high, it often leads to a temporary pause in deal activity as investors turn cautious. Furthermore, as companies raise more capital through QIPs, existing shareholders should monitor potential share dilution, which can affect earnings per share. Inflationary pressures and profit margin concerns in certain sectors also remain key monitorables for anyone evaluating these companies. The sustainability of this high deal activity will likely depend on continued domestic liquidity and the ability of companies to maintain steady profit growth in a competitive environment.