Whalesbook
2026 Outlook: Capital Markets Poised for Revival
India's capital markets are gearing up for a substantial rebound in calendar year 2026, according to S Ramesh, Managing Director and Chief Executive Officer at Kotak Investment Banking. Fundraising activity is expected to return to levels seen in 2024, signaling a robust recovery driven primarily by equity capital markets.
M&A Momentum Expected to Accelerate
Mergers and acquisitions (M&A) deal values are projected to climb significantly, reaching an estimated $130-135 billion. This surge is anticipated to build upon the strong momentum observed in the latter half of 2025, which saw approximately $70 billion in announced transactions. In 2025, M&A activity was particularly strong, totaling around $121 billion, led by the financial services sector.
IPO Maturation Drives Investor Returns
The recovery in fundraising will be spearheaded by initial public offerings (IPOs) and sell-down activities. Ramesh noted that many new-age companies are now approaching public markets at a more advanced stage, having secured private capital during their riskier phases. This maturity has led to improved governance and business models, resulting in significantly higher returns for IPO investors, with returns nearing 36-37% in 2025 compared to the broader IPO average of about 12%.
Broad-Based Sectoral Activity Anticipated
Deal activity is expected to be broad-based across various sectors rather than concentrated. While financial services and information technology will remain active, significant discussions are also underway in industrials, manufacturing, and consumer-facing businesses. Private equity investors are poised to compete intensely with corporate and multinational buyers for assets, contributing to a dynamic market.