We don't expect deal making to slow down due to elections'

Underpinned by the country's favourable macros, the outlook for India's equity capital market (ECM), debt capital market (DCM) and mergers and acquisitions (M&A) remains positive, says GANESHAN MURUGAIYAN, head of corporate coverage and advisory, BNP Paribas India.

- GANESHAN MURUGAIYAN

In an email interview with Samie Modak, Murugaiyan, who oversaw close to a dozen ECM deals in 2023, says large sell-downs by private equity (PE) firms show the depth of the domestic market. Edited excerpts:

The past 12 months have proved quite a fertile ground for share sales. What according to you has underpinned this deal-making activity?

At present, India is in a sweet spot when compared to other emerging markets.

Political stability, policy continuity, robust macroeconomic fundamentals and a stable currency have been conducive for earnings growth. Additionally, the market benefits from a consistent inflow of fundsboth from foreign portfolio investors (FPIs) and mutual funds (MFS). However, despite these positive factors, FPIs currently have "under-ownership" in the Indian market due to selloffs seen in earlier years. As it corrects, it will provide a cushion against any decline in domestic inflows. Moreover, expectations of declining interest rates globally will further boost flows into equities.

What is the outlook for DCM and ECM for the next 12 months?

There is a cautious optimism amid lingering geopolitical uncertainties.