Bank of America expects Indian IPO market to pick up within six months

Bank of America Corp. expects initial public offerings in India will regain their recent momentum as soon as in the first quarter of next year, bolstered by the underlying strength of the market.

“I think IPOs have taken a breather but it will be probably three to six months away from coming back,” Debasish Purohit, co-head of India investment banking at Bank of America, said in a Bloomberg Television interview on Wednesday.

Some of last year’s IPO activity has more recently given way to sales of secondary shares, which are quicker and give holders a chance to monetize their stakes, Purohit said.

India’s equity capital market activity is down about 40% this year, he said, outperforming a 70% slump across Asia.

Purohit expects mergers and acquisitions activity in India will continue to be strong, aided by consolidation in consumer-facing industries such as financial services and consumer internet-based companies.

“A large part of India’s M&A dealmaking activity will be inbound because there are sectors in India who are net capital importers,” said Purohit, who was elevated as the co-head of the unit in June.

Most of the inbound deals will be seen in energy transition, infrastructure, food and beverages and health care, he said, especially when global pharma majors tend to diversify away from the China supply chain or are making significant investments into India.

--With assistance from Haslinda Amin and Rishaad Salamat.