Citi Sees India IPO Market Rebounding In H2 Despite Global Headwinds

India’s primary market activity is expected to strengthen in the second half of 2026 after a muted start to the year, according to Citigroup Inc., even as global volatility, foreign capital outflows and pressure on the rupee continue to weigh on investor sentiment.

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Data compiled by Bloomberg showed Indian companies have raised nearly $3.5 billion through initial public offerings so far in 2026, sharply lower than the $22.4 billion mobilised in 2025, when India emerged as the world’s third-largest IPO market.

Citigroup said IPO activity in India has historically remained concentrated in the latter part of the year, as per Bloomberg. Arvind Vashistha, India head of equity capital markets at Citigroup, said Bloomberg that 60%-70% of equity issuance over the last two years was completed during the final quarter.

He added that the investment bank expects full-year issuance volumes to remain at least in line with last year and potentially rise by 5%-10%.

The market is also closely tracking large upcoming share sales, including the proposed listing of Jio Platforms Ltd. and the long-pending initial public offering of the National Stock Exchange of India Ltd.

Foreign Flows, Rupee Pressure To Continue To Weigh On Markets

Foreign portfolio outflows, crude oil prices and geopolitical tensions in West Asia have put pressure on Indian markets this year.

India’s Sensex index has declined around 11% so far in 2026, while the rupee has weakened to record lows amid rising energy import costs.

India remains one of the world’s largest crude oil importers and depends heavily on energy shipments routed through the Strait of Hormuz, a key maritime corridor that has remained disrupted for more than two months.

Citigroup noted that uncertainty linked to global conflicts and higher energy costs has widened valuation expectations between buyers and sellers in merger and acquisition transactions.

Rahul Saraf, Citigroup’s India head of investment banking, said deal-making activity has become more selective, with investors placing greater emphasis on valuation, due diligence and downside protection.

Cross-Border Deal Activity Remains Active

Despite the uncertainty, Citigroup expects merger and acquisition activity involving Indian companies to remain active.

As per Bloomberg, the bank said multinational companies are increasingly reviewing portfolios and divesting non-core businesses in India. Recent transactions include Novartis AG selling a majority stake in its Indian business, FMC Corp. divesting its local operations and airport operator ADP selling a stake in GMR Airports Ltd.

Indian companies are also continuing to pursue overseas acquisitions. One of the largest outbound transactions announced recently involved Sun Pharmaceutical Industries Ltd., which agreed to acquire U.S.-based women’s healthcare company Organon & Co. at an enterprise valuation of $11.75 billion.

Citigroup added that despite current market softness, expectations remain for gradual stabilisation and recovery in capital market activity during the remainder of the year.