Rothschild & Co Bolsters India Advisory, Wins NSE IPO Mandate

Rothschild & Co is strengthening its advisory presence in India, aligning with the country's growing capital markets. The firm is increasing its work in fundraising and mergers & acquisitions (M&A), planning to expand its team that supports debt syndication clients. This move comes as Rothschild is advising the National Stock Exchange (NSE) on its upcoming initial public offering (IPO), a deal it won in February. The firm will help select key intermediaries, including lead managers and legal counsel, and manage the complex documentation and logistics for the IPO. This role highlights Rothschild's importance in major corporate finance events in India.

NSE IPO Plans and Market Conditions

The NSE's IPO preparation, with Rothschild & Co acting as an independent advisor, is a key event for India's financial sector. The exchange plans to list through an offer-for-sale (OFS), where existing shareholders aim to sell about 4-4.5% of their stake. This deal, estimated at $2.5 billion, is expected in the first half of 2026. While India's IPO pipeline is strong, featuring other large companies like Reliance Jio, Oyo, and PhonePe, recent market trends have made investors more cautious. Despite many mainboard and SME listings in recent years, investor interest has cooled. Investors now carefully pick companies with clear profit growth and solid plans for using their money. This has led to penalties for overpriced offerings. Recent Indian IPOs have averaged price-to-earnings (P/E) ratios in the high 30s to 40s, a level some observers feel is too high compared to post-listing performance, suggesting potential mispricing.

Domestic Investors Lead as Foreign Funds Exit India

India's equity markets are seeing a major change in investor behavior. Foreign portfolio investors (FPIs) have continued to pull significant amounts of money out in 2026, with withdrawals in the first four months already exceeding the total for all of 2025. This outflow, over $20 billion, is largely due to rising geopolitical tensions in the Middle East, which have pushed oil prices up and fueled inflation worries. March alone saw record foreign investor outflows of roughly $12 billion. As a result, foreign investors are no longer the main drivers of IPO pricing. Instead, domestic institutional investors, such as mutual funds and insurance companies, are now setting prices, providing steady demand and absorbing new listings even during global market swings. This shows a more stable domestic market base.

India's M&A and Private Equity Scene

Rothschild & Co is also benefiting from strong cross-border M&A activity in India. Indian companies are increasingly buying foreign businesses to expand globally and gain strategic capabilities. Deal values for overseas acquisitions jumped significantly in 2025, supported by investment from regions like the Middle East and Japan. Key sectors for these deals include technology, financial services, pharmaceuticals, and industrials. For example, Wipro recently acquired Olam Group's IT subsidiary, Mindsprint, for $375 million. Private equity firms are also active, favoring investments in companies and actively seeking to sell their stakes. They have allocated substantial capital to India's healthcare, pharma, financial services, technology, and consumer sectors. A main challenge for private equity remains finding good investment opportunities at reasonable prices amid this busy market.

Market Risks and IPO Challenges

Despite these opportunities, significant risks remain. The ongoing outflows from foreign investors, driven by persistent geopolitical instability and economic worries like rising oil prices and currency drops, continue to hurt market sentiment. Companies like PhonePe have delayed IPO plans due to valuation concerns and market volatility, showing the difficulty in getting desired listing prices. Similarly, Oyo's IPO, planned for 2026, may face delays and lower valuation expectations. The weak performance of many recent IPOs, trading below their initial prices, further shakes investor confidence and calls for a more careful approach to new listings. While domestic money provides some support, a long period of geopolitical tension or economic shocks could severely reduce M&A and IPO prospects.

Outlook for India's Markets and Rothschild's Role

India's capital markets are set for further change. While outside factors like geopolitical events and global interest rates create uncertainty, the solid demand from domestic investors and the need for companies to strengthen supply chains are expected to keep M&A and IPO activity going. Rothschild & Co's strategy of focusing on key growth areas and adapting to the changing investor landscape—especially the greater reliance on domestic capital—positions it well to handle these complexities. If geopolitical tensions ease and valuations become more attractive, foreign capital could return, further energizing the market. For now, however, the focus is on careful selection and a stronger emphasis on fundamental value, areas where Rothschild's advisory expertise is crucial.