M&A Surges to $86.9 Billion as Indian Public Capital Markets Plunge in H1 2026

M&A Surges to $86.9 Billion as Indian Public Capital Markets Plunge in H1 2026​

India’s public capital markets experienced a significant downturn during the first half of 2026, with equity and bond issuance marking three-year and four-year lows, respectively. This widespread slowdown comes sharply contrasted by a robust surge in Mergers and Acquisitions (M&A) activity, indicating that strategic deal-making is replacing reliance on public funding for growth.

Equity Capital Markets Struggle; Follow-ons Sustain Limited Activity​

The equity capital markets (ECM) found stability primarily through follow-on offerings, which accounted for 77% of all equity proceeds and raised $12.7 billion. Even these vital deals saw a decline of 33% compared to the previous year.

Initial public offerings (IPOs), however, continued to struggle amid market uncertainty. Companies successfully raised only $8.8 billion through IPOs, which represents a steep 38.5% year-on-year drop with fewer deal completions. Noteworthy issuers included Vishal Mega Mart, JSW Infrastructure, and Adani Ports.

Debt Issuance Drops Despite Financial Sector Dominance​

The debt capital market mirrored the cautionary sentiment seen in equity. While financial institutions remained the dominant borrowers in this segment, issuing $29.2 billion (nearly 78% of total bond issuance), even this powerful sector saw a significant decline.

Bond issuance fell by 40.5%, reaching a four-year low despite the sheer size of the transactions. Axis Bank was identified as a key performer in debt underwriting rankings, securing $4.62 billion in proceeds and commanding a 12.3% market share. The overall cooling suggests companies were cautious about raising fresh debt capital.

M&A Rises as Companies Pivot from Public Investors​

In stark contrast to the sluggish public markets, deal-making activity surged dramatically. Any Indian involvement in M&A reached $86.9 billion in the first half, marking a 31% increase from last year and representing the highest H1 value since 2022.

The Materials sector led this high-growth segment. Key transactions included a $20.6 billion Vedanta Aluminium Metal deal and Sun Pharma’s purchase of Organon & Co in the US for $11.4 billion. This focus on acquiring assets or restructuring suggests that companies are prioritizing strategic takeovers over tapping public capital.

Investment Banking Fees Fall as Capital Markets Weaken​

The weaker activity across primary equity and debt markets reflected in investment banking fees. Total investment banking fees across India fell by 20%, amounting to $614 million. Citi emerged as the clear leader in overall investment banking fees, earning $60.3 million and capturing a 9.8% wallet share while also topping M&A advisory rankings.

While Jefferies LLC led the ECM league table with $2.56 billion in deals and a 15.5% market share, Ernst & Young, along with Axis Bank and Citi, were noted for their key roles in advisory services. The overall trend indicates that cautious investor sentiment and higher costs of capital are prompting companies to favor strategic private deals over large public raises.