India’s public sector is becoming a major engine of expansion for investment banks: Report
According to a new research released on Thursday, the government’s plans for divestiture and robust domestic inflows are helping the public sector play a significant role in propelling growth for investment banks in India.
Investment banks have a lot of options as the Department of Investment and Public Asset Management (DIPAM) has set a divestiture target of Rs 47,000 crore for FY26.
According to a report by Emkay Investment Banking, the market has remained busy in recent years due to the initial public offerings (IPOs) of significant PSUs like LIC, IREDA, and ONGC as well as offers for sale (OFS) in businesses like IRCTC, HAL, and Coal India.
The expansion of investment banking in FY26 and beyond is anticipated to be further fueled by upcoming initial public offerings (IPOs) and fundraising initiatives from Bharat Coking Coal, CMPDI, MNGL, IREDA, and other banks.
Strong investor involvement has persisted in India’s equities markets. According to the research, qualified institutional placements (QIPs) raised Rs 1.36 lakh crore in 2024, while 92 initial public offerings (IPOs) raised a total of over Rs 1.62 lakh crore.
According to the research, the market has also received consistent support from the ongoing inflow from systematic investment programs, or SIPs.
An excellent measure of investor confidence, SIP inflows have continuously topped Rs 20,000 crore for the previous 11 months, and have topped Rs 25,000 crore in the last five.
In order to maintain market stability, domestic institutional investors, or DIIs, have been essential. Over Rs 5.7 lakh crore was invested by DIIs in FY25, which improved investor morale and market liquidity.
It is anticipated that the Reserve Bank of India’s (RBI) major policy measures will improve market liquidity and credit expansion even more.
The financial sector will benefit from the expected reduction in repo rates, the easing of risk weights on NBFC loans, and liquidity measures.
According to the report, measures in the Union Budget that are intended to boost consumption are also anticipated to generate good economic momentum.