NextFin News - India’s equity capital markets are still positioned for another record year even after a slower start to 2026, with Kotak Investment Banking saying a stronger second half could push initial public offerings to fresh highs. V. Jayasankar, managing director and deputy chief executive at the firm, said in a Bloomberg TV interview that the pipeline remains unusually deep and that the number of IPO filings in India is 1.5 times higher than in the past two years.
The backdrop is already large enough to make a pause look temporary rather than structural. KPMG said India’s IPO market raised 1.76 trillion rupees from 108 companies in FY 2025-26, a historic milestone that reflected both the depth of the issuer pipeline and the appetite of investors for new listings. Against that base, a softer start to 2026 does not necessarily undermine the record-year case; it mainly changes the timing.
Jayasankar said recent turmoil in the Middle East delayed some new offerings, underscoring how quickly external shocks can alter the IPO calendar. That is a reminder that large listings are often less about the absence of demand than the absence of a calm enough window to price risk. When conditions turn volatile, issuers tend to wait, and bankers tend to re-open the dialogue when the market steadies.
That dynamic is central to India’s current capital-markets story. The country’s IPO market has become deep enough that one weak quarter does not erase the full-year setup. Domestic liquidity, a broad investor base, and a steady flow of companies seeking public capital have made the market more resilient than in earlier cycles. If the second half delivers the reopening Kotak expects, the year can still end at another record despite the slow first act.
Why The Slow Start May Not Matter
The core case for a record year is not that every month will be strong. It is that India now has enough issuance depth that a weak opening stretch can be offset later, especially when several large transactions are waiting for a better window. Jayasankar described the pipeline as “incredible” and said it includes “high-quality, some very large transactions,” a description that points to a market driven by a few meaningful anchors rather than a broad collapse in activity.
That matters because IPO markets rarely move in a straight line. Issuers cluster around periods when volatility is contained, benchmark indexes are supportive, and pricing risk is easier to manage. When those conditions weaken, even strong candidates can pause. The result is often a quiet start to the year followed by a catch-up wave later, if sentiment improves. India’s market structure, with its large domestic mutual fund and retail base, has made that pattern more visible.
The 1.5-times-higher filing count is the clearest sign that the pipeline has not dried up. It suggests that companies are still preparing documents, securing bankers, and testing investor appetite even if they are not all going to market at once. For investors, that looks like deferred supply rather than vanished supply. For bankers, it means the work is already underway and can be converted into launches once the window reopens.
“We have an incredible pipeline, high-quality, some very large transactions,” V. Jayasankar said in a Bloomberg TV interview.
The practical takeaway is that a slower start does not automatically mean a weaker year. If anything, it can concentrate demand into a smaller number of larger deals, which is often how record fundraising years are built. The risk is only if volatility lasts long enough to push the supply pipeline into 2027.
What Is Supporting The Market
The second reason Kotak’s outlook is credible is that India’s IPO market has already shown it can absorb large volumes. KPMG’s FY 2025-26 tally of 108 IPOs and 1.76 trillion rupees in proceeds is not just a record headline; it is evidence that companies across sectors still see public markets as a viable source of capital and exit liquidity. That sort of breadth usually reflects a market where domestic investors are willing to fund growth even when global risk sentiment is less stable.
India’s recent listing boom has also been reinforced by a broader shift in household financial behavior. More savings have moved into mutual funds and equities, giving issuers a deeper home-market base than they had in earlier cycles. That domestic cushion helps explain why India has been able to sustain strong issuance even when foreign flows have turned uneven or when global macro news briefly hits risk appetite.
There is also a timing advantage. Many private companies prefer to come public after their own operating metrics have matured enough to support a premium valuation, but before growth slows too much. In a market that has delivered repeated strong fundraising years, the incentive to launch sooner rather than later can become self-reinforcing. Companies see peers getting funded, bankers see a workable window, and investors become accustomed to a steady supply of new names.
Still, the record-year thesis depends on the second half of 2026 delivering a meaningful pickup. Jayasankar’s comments point to a backlog that needs a calmer risk backdrop to convert into listings. If that backdrop appears, the numbers can add up quickly. If it does not, the market may still have a good year by historical standards, but the word “record” becomes harder to defend.
What Could Break The Thesis
The biggest risk is not a lack of companies; it is a lack of confidence. IPOs are discretionary transactions, and the market can turn cautious faster than issuers can re-price risk. A fresh geopolitical shock, a volatility spike in local equities, or a broader shift in global risk appetite could all push offerings back again. In that case, the pipeline would remain intact on paper, but fundraising would slip into another period.
Another risk is valuation fatigue. A strong IPO market depends not only on supply but also on the willingness of investors to pay up for growth. If new listings begin to struggle after debut, or if secondary-market performance weakens, issuers may become less willing to launch. That is why the record story is always partly a sentiment story: the numbers can be present, but the market still has to believe in them.
For now, Jayasankar’s remarks suggest the opposite is true. The deal pipeline is full, large transactions are queued up, and the near-term pause looks tied to external uncertainty rather than a structural downturn. That is why India’s IPO market can plausibly end 2026 at another record even after an uneven opening half.
The broader implication is straightforward. India’s capital-markets ecosystem is no longer dependent on uninterrupted momentum month by month. It has enough depth that a weak start can be absorbed if the second half reopens. That makes the current lull look less like a reversal and more like a delay.
If the next few months bring calmer geopolitics and a steadier equity backdrop, the year’s most important IPO story may be the one that was postponed, not the one that was canceled.
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