India To See Increased Momentum In Cross-Border Deals And Ipos In 2026: JP Morgan

(MENAFN- Live Mint)

India is expected to see heightened momentum on cross-border mergers and acquisitions (M&A) and initial public offerings (IPOs) through 2026 as companies worldwide look to monetise their stakes and take advantage of the country's rich valuations, top executives at JP Morgan said at a media round table on Tuesday.

“While buying here will remain a priority, our Indian clients will also acquire assets outside the country as there are several high quality businesses that are owned by private equity globally that will come to market and Indian clients are keen to pursue growth in their familiar markets," said Nitin Maheshwari, co-head of investment banking at JP Morgan in India. He noted that this strategy was growing in popularity, driven by both a relative value perspective and the need to create a balanced portfolio of business.

Maheshwari said the firm was also seeing more instances of US and European multinationals looking to actively manage their India portfolios and enhance value by listing their local subsidiaries.“In selective cases, we are seeing entities exit or partner with local businesses to maximize value for their overall global business."

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He added that firms in Japan and the Middle East were actively looking to acquire assets in India.“Middle East and Japan are super active corridors for us, which we expect to continue in 2026 along with selective inbound investments from US and Europe which have been active investors in India organically," Maheshwari said, adding that several factors including good collaboration between governments and a strong cultural fit have also caused private equity investors to allocate more capital to these regions.

Prominent M&A transactions that JP Morgan has advised include Schneider Electric's acquisition of the remaining 35% stake, worth €5.5 billion, in its Indian joint venture from Temasek; Capgemini's $3.6 billion buyout of WNS; Sumitomo Mitsui Banking Corp's 20% stake purchase for $1.6 billion in Yes Bank, EQT's sale of AGS Health to Blackstone, and Emirates NBD's acquisition of a majority stake in RBL Bank.

While M&A transactions are increasing in size and complexity, the broader Indian market has benefitted from robust domestic consumption, expanding exports, digital transformation and government support on the back of macroeconomic stability and stable inflation.

Ravi Shankar, co-head of investment banking at the firm, also spoke about the strong revival in outbound activity this year.“The last time it peaked was during 2006-2007. We have seen multiple instances this year and there are still a lot of conversations underway as corporate balance sheets in India are very liquid," he said.

“I think we are going to see not only a well-performing capital market but also outbound M&A becoming bigger because Indian companies have become a lot more confident about the ability to fund acquisitions," Shankar added. He said sectors such as infrastructure, healthcare, parts of technology, and financial services have seen the most traction this year.

The co-heads also highlighted investors' growing appetite to do bigger deals in India with the goal of picking up controlling stakes in assets.“This wasn't the case about a decade ago, but today we are seeing a lot more dialogues focused on control deals. For private equity players, there's ample talent to hire CEOs to run these assets to reduce dependence on the promoter, and owners of these assets are also warming up to the idea of selling their business for someone else to run," Maheshwari said.

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IPO firehose

Meanwhile, India's IPO market has been equally promising, with about 50-70% of public listings driven by private-equity-owned assets. Additionally, nearly 20% of companies going public are new-age ones, said Abhinav Bharti, managing director and head of India Equity Capital Markets.

JP Morgan managed the IPOs of the Indian arms Hyundai Motor Co and LG Electronics. It also managed the public offerings of Hexaware Technologies Ltd ($1 billion), Vishal Mega Mart ($1 billion) and Swiggy ($1.3 billion) in recent years.

With robust activity on both fronts, companies are also increasingly evaluating a two-track process to derive value from their assets.“This has become an active part of any asset we are selling today. There is a healthy debate around M&As vs private market and this is on top of mind for many situations we engage in," Maheshwari said.

Bharti added that there is an abundant supply of companies looking to go public, and the pipeline only looks stronger for next year as domestic inflows remain resilient. With companies already surpassing last year's IPO levels in 2025, Bharti expects IPOs worth $20 billion per year to be the base threshold as companies across sectors, including industrials and consumer technology, look to tap the public markets.

He is optimistic on the demand side as well, and expects foreign inflows to return in 2026.“Foreign flows will be correlated largely with sentiment on whether India is fitting the AI theme or not. We believe the AI story has already played out this year as India has been the place for global investors to sell and invest in emerging markets such as Korea and Taiwan," Bharti said.

As earnings growth picks up, foreign portfolio investors are expected to return to secondary markets after remaining buyers in primary markets over the past two years.“The defensive nature of the Indian capital markets should allow for some of those inflows to start returning the moment that turns around and we feel like we are at the cusp of that," he concluded.

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