India is likely to have significant economic growth as the government plans to increase its capital expenditure (capex) for the fiscal year 2025 by 8-10%, up from the previously allocated Rs 11.11 lakh crore.
This adjustment comes on the back of higher-than-expected tax revenues and a record surplus transfer from the Reserve Bank of India (RBI), according to a recent report by Pantomath Group.
Recent election outcomes further bolster positive market sentiment, instilling confidence in ongoing policies and reforms.
This optimistic outlook supports a medium to long-term positive trend for Indian equities.
In a notable milestone, India’s stock market capitalization surpassed the $5 trillion mark for the first time in the second quarter of this year.
This achievement positions India as the fifth country globally to reach this landmark, joining the ranks of the US, China, Japan, and Hong Kong.
“Favourable market conditions, high liquidity, a conducive growth environment with stable interest rates, and benign inflation have facilitated a boom in the IPO market,” stated Mahavir Lunawat, Managing Director of Pantomath Capital Advisors.
He emphasized that the IPO market is likely to gain further momentum post-budget, with India emerging as a new frontier for global equity funding.
55 Companies Set To Raise Rs 68,000 Crore In India’s IPO Boom
The primary market in India is likely for a vibrant period with 55 companies planning to raise over Rs 68,000 crore through IPOs.
In the first half of 2025 alone, 35 IPOs have already raised approximately Rs 32,000 crore, with an average subscription rate of 61 times.
Sector-wise, the real estate market is on the cusp of robust growth, driven by supportive government policies and urbanization.
The sector is projected to require Rs 14 lakh crore ($170 billion) in debt financing from 2024 to 2026, with Mumbai, NCR, and Bengaluru expected to benefit significantly from increased construction finance and lease rental discounting (LRD), projected to rise by 40% over the next three years.
In the cement industry, major players are expanding through inorganic acquisitions, anticipating a compounded annual growth rate of 6-7% in the coming years.
The top five players are likely to control over half of the market by March 2025.
The Fast-Moving Consumer Goods (FMCG) sector is also showing signs of recovery, particularly in rural areas.
Companies are offering positive guidance for the first time in several quarters, citing factors such as a normal monsoon, a robust rabi crop, a bumper wheat crop, and supportive government measures like increased Minimum Support Price (MSP) and higher spending on the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA).
In the automobile sector, India is likely to introduce the Faster Adoption and Manufacturing of Electric Vehicles (FAME) 3 scheme in the upcoming budget to promote the sale of electric vehicles.
The scheme is likely to receive a budgetary allocation of about Rs 10,000 crore, supporting the adoption of electric two, three, and four-wheelers.
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