Deals are becoming more selective, with greater scrutiny on valuation
India's capital markets stand at a threshold where ambition and adversity are in open negotiation. Citigroup forecasts a record year of public offerings — anchored by Jio Platforms and the National Stock Exchange's own listing — even as blocked shipping lanes, a weakened rupee, and a declining Sensex remind investors that confidence is never unconditional. What is unfolding in Mumbai's deal rooms is a familiar human drama: the long-term structural story pressing forward against the short-term weight of a world in disorder. The question history tends to ask in such moments is not whether the tide turns, but who is still standing when it does.
- The Strait of Hormuz has been effectively closed for over two months, driving energy costs higher and accelerating foreign capital flight from one of the world's most oil-dependent economies.
- The rupee has hit record lows and the Sensex has shed 11 percent this year, forcing the Indian government into defensive maneuvers — from curbing gold imports to proposing tax relief for battered consumers.
- Despite the turbulence, Citigroup maintains that India's IPO calendar remains full, with Jio Platforms and the NSE listing poised to be landmark transactions if execution conditions stabilize.
- Multinationals are quietly retreating — Novartis, FMC, and ADP have all divested Indian assets — while Indian companies are moving in the opposite direction, hunting for acquisitions abroad with growing confidence and capital.
- Sun Pharma's $11.75 billion agreement to acquire Organon & Co. signals that Indian firms are no longer just participants in global M&A — they are increasingly setting the terms.
- Valuation gaps between buyers and sellers are widening under geopolitical pressure, shifting deal culture from opportunism toward discipline: deeper due diligence, stronger downside protections, and harder questions about fundamentals.
India's investment banking community is preparing for what could be a record year of initial public offerings, even as the world around it grows more complicated. Citigroup is leading the optimism, pointing to a pipeline anchored by two landmark transactions: a debut share sale by Jio Platforms and the long-anticipated listing of the National Stock Exchange. Neither will be easy to execute, but both remain live possibilities.
The headwinds are real and measurable. The Strait of Hormuz has been blocked for more than two months, squeezing energy supplies for a country that imports more oil than almost any other. Foreign capital has been leaving. The rupee has fallen to historic lows, and the Sensex is down 11 percent on the year. New Delhi has responded with a mix of import restrictions, export bans, and proposed tax relief — the toolkit of a government managing a slow bleed rather than a crisis.
Yet the structural story has not changed. Citigroup analyst Vashistha argues that India's growing role in artificial intelligence will shape where global capital flows over time, even if it won't reorder the near-term issuance calendar. The country's positioning in technology remains a draw for international investors thinking beyond the current turbulence.
On the M&A side, a clear pattern has emerged: foreign companies are pulling back while Indian firms push outward. Novartis, FMC, and ADP have all sold Indian assets in recent months. In their place, Indian acquirers are moving with unusual confidence. Citigroup's India banking head Rahul Saraf describes the country as a natural buyer — one with both the capital and the strategic logic to pursue large deals abroad. The clearest illustration is Sun Pharma's agreement to acquire Organon & Co. for $11.75 billion, one of the largest overseas acquisitions ever made by an Indian company.
Geopolitical pressure has not stopped deals, but it has changed how they are made. Valuation gaps have widened, and buyers are demanding more rigor — tighter due diligence, stronger protections, clearer rationale. Saraf and his colleagues expect conditions to stabilize, and when they do, the pipeline will be ready. The friction is real, but so is the underlying momentum.
India's investment banking pipeline is bracing for a record year of initial public offerings, even as geopolitical turbulence and currency pressures test the market's resilience. The forecast comes from Citigroup, which sees the country's capital markets pushing through near-term headwinds to deliver landmark transactions—chief among them a potentially historic first share sale by Jio Platforms and the long-awaited listing of the National Stock Exchange itself.
The optimism is tempered by real constraints. The Middle East conflict has disrupted global energy supplies, and India, the world's third-largest oil importer, feels the squeeze acutely. The Strait of Hormuz has been effectively blocked for more than two months, sending energy costs higher and triggering a wave of foreign capital leaving the country. The rupee has fallen to record lows. The Sensex, India's benchmark stock index, is down 11 percent for the year. The government has taken defensive measures—tightening gold imports, banning sugar exports, asking some workers to shift to remote schedules to conserve fuel, and proposing tax cuts to cushion the blow.
Yet beneath this turbulence, structural forces are still moving deal activity forward. Vashistha, a Citigroup analyst, points to India's emerging role in artificial intelligence as a theme that will shape where foreign capital flows, though he argues these currents won't stop companies from going public or pursuing acquisitions. The country's positioning on AI, and how it reshapes employment and consumption patterns, will matter to investors—but it won't derail the issuance calendar.
On the mergers and acquisitions front, the picture is clearer. Multinationals are reassessing their portfolios and shedding non-core operations. Novartis sold a majority stake in its Indian unit in February. FMC Corporation offloaded its local business. ADP, the Paris airport operator, sold a stake in GMR Airports Ltd. These are not anomalies; they reflect a broader pattern of foreign companies stepping back from India to focus elsewhere.
Meanwhile, Indian companies are becoming aggressive buyers on the world stage. Rahul Saraf, Citigroup's India investment banking head, describes the country as "increasingly a natural buyer." Indian firms have both the financial capacity and the strategic appetite to pursue large acquisitions, particularly where the logic is clear—entering new geographies, acquiring capabilities, or cutting costs. The most vivid example is Sun Pharmaceutical's agreement to acquire Organon & Co., a New York-listed women's healthcare company, for an enterprise value of $11.75 billion. It ranks among the largest overseas deals ever struck by an Indian company.
But the geopolitical strain is reshaping how deals get made. The gap between what buyers want to pay and what sellers expect has widened. Saraf notes that transactions aren't vanishing; they're becoming more selective. Buyers are scrutinizing valuations more closely, conducting deeper due diligence, and demanding stronger protections against downside risk. The calculus has shifted from "let's do the deal" to "let's do the deal right."
Still, Saraf and his colleagues at Citigroup expect stabilization ahead. Markets have softened in the near term, but the broader conviction is that recovery will follow. The IPO pipeline remains full. The appetite for strategic acquisitions remains real. India's role in global capital flows, particularly around technology and artificial intelligence, is only deepening. The question is not whether deals will happen, but how long the current friction will last and what valuations will look like when it clears.
Citações Notáveis
Indian companies retain both the capacity and the willingness to pursue large, strategic acquisitions—particularly where there is a clear industrial rationale such as geographic expansion, capability building, or cost optimization.— Rahul Saraf, Citigroup's India head of investment banking
Deals are not disappearing, but they are becoming more selective, with greater scrutiny on valuation, diligence, and downside protection.— Rahul Saraf, Citigroup
A Conversa do Hearth Outra perspectiva sobre a história
If India's IPO market is supposed to be so strong, why is the Sensex down 11 percent this year?
Because the geopolitical shock—the blocked Strait of Hormuz, the energy crisis—is real and immediate. It's pushing foreign money out and weakening the rupee. That's a near-term pressure that can coexist with a strong structural pipeline. The deals are still coming; the market is just more cautious about price.
So Jio Platforms and the NSE listing—are those actually happening, or are they just wishful thinking?
They're in the pipeline, but they're proving harder to execute than expected. That's why Citigroup is hedging a bit. The potential is there for record-breaking offerings, but the timing and the terms are uncertain.
What's changed about how deals get done in this environment?
Buyers have gotten much more skeptical. They're asking harder questions about valuation, digging deeper into due diligence, and insisting on better protections if things go wrong. It's not that deals are dead—it's that the easy deals are gone.
Indian companies buying American companies for $11 billion—that seems bold given the rupee is weak.
It is bold, but it also makes sense. Sun Pharma is buying capability and market access, not just currency. When the strategic logic is clear, companies will move even in uncertain times. That's what separates the serious players from the rest.
What happens if the Middle East situation doesn't stabilize?
Then the pressure on energy costs and the rupee continues. The government's defensive measures—the import restrictions, the tax cuts—buy time, but they're not solutions. The real relief comes when global energy supplies normalize or when India finds alternative sources.