Amitabh Malhotra, Vice Chairman of Investment Banking at HSBC India, believes the momentum is being driven by multiple factors — a supportive issuance environment, easing global uncertainties, and strong domestic fundamentals. “You have seen FIIs increase interest in the Indian market, particularly since April 2025; they were net sellers before that, but you have seen them become net positive buyers,” he said.
Malhotra noted that robust GDP growth, recent rate cuts, and positive full-year corporate earnings have boosted market sentiment. Retail and mutual fund flows have further supported this resurgence, leading to reduced volatility and improved investor confidence.
He also pointed to the strength of recent IPOs, saying, “Recent IPOs at optimum valuation, strong moats, robust financial and well-funded growth plans offer really a long-term value creation that has received strong interest from local, international investor. And we think it will continue to be like that.”
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According to Malhotra, investor maturity has grown, particularly in accepting Offer for Sale (OFS) components in IPOs — provided company fundamentals are solid and pricing is fair. He expects a shift toward more OFS-led IPOs in 2026, especially as promoters and private equity players look to recycle capital for other investments.
Bhavesh Shah, Managing Director and Head of Investment Banking at Equirus, called the current capital market environment “a completely game-changing scenario.” He highlighted the strong absorption capacity in the market and the rising confidence of sellers.
On the demand side, Shah pointed to the ₹26,000 crore flowing into mutual fund SIPs every month — nearly $3 billion — as a key driver of deal activity. “Mutual fund investors are always looking for great companies to invest in,” he said, adding that block deals allow them to scale their exposure in companies they already believe in.
He stated that mutual funds often get limited allocations during IPOs despite significant effort and due diligence. Block deals, therefore, offer them a more efficient way to increase holdings without distorting stock prices. “If the company is doing what they say — maintaining a good say-do ratio — mutual fund investors are putting more and more money,” Shah said.
For the entire discussion, watch the accompanying video
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