The Indian IPO markets started FY26 with caution, as US President Donald Trump’s tariff actions soured sentiments. However, activity has picked up in Q2. In an interaction with Moneycontrol, Ajay Garg, Founder and Managing Director of Equirus Capital, said that he sees the second half of the year to be more active for the IPO markets, as well as for QIPs (Qualified Institutional Placement). He also discussed plans to take Equirus public, its new NBFC unit and the expansion of its wealth management business.
Edited excerpts:
What’s your reading of the economic environment and corporate activity right now amid the tariff issues and concerns of slowing demand domestically?
If you look at it, India continues to be a very strong domestic consumption story. Yes, there are sectors like textiles, gems and jewellery, and some auto components that feel the tariff pinch if the US maintains higher levels. But I’ve always believed Indian entrepreneurs are very resilient. They solve problems and build competencies that make them more relevant globally.
What we supply to the world is not just bulk commodities; there is value-add, design, and integration involved. That gives Indian companies a stronger footing in the global ecosystem.
On the domestic side, if the government pushes GST reforms, then sectors like autos, building materials, and apparel will benefit significantly. You have already seen how the markets reacted to signals of reform. Overall, the government has been consistently reforming GST. This tariff situation may have acted as an external trigger, but India anyway needs to keep scaling economically to become more relevant in global equations.
Manufacturing has been a big theme, with a wave of IPOs from that sector. Do you see this momentum continuing despite tariff uncertainty?
Absolutely. In the last five years, we saw more manufacturing IPOs than ever before. The PLI (profit linked incentive) scheme and indigenisation drive have given domestic manufacturing a huge boost. India also has structural advantages such as talent, manpower, resources, and a young workforce, while much of the developed world is ageing.
We’re also seeing a parallel trend of global capability centres (GCCs), which are mushrooming in India every week. It’s not just technology back offices. Even design and manufacturing support functions are being set up here. That underlines the long-term relevance of Indian talent in the global value chain.
Do you see any impact on global private equity capital inflows to India, given the tariff concerns?
If you look at Asia-Pacific allocations, India has already become the anchor for many global funds. Exits through capital markets are happening at scale, with serious capital being returned to investors. Every week you see block deals.
What drives private equity is growth and liquidity. India offers both high growth and deep markets that allow exits. That’s not the case in many other emerging markets. So, while there may be some external pressures, India will remain a priority destination for capital.
IPO activity was muted in Q1 FY26 but is picking up in Q2. Do you see the second half of the fiscal being a better period for the IPO market than H1?
Yes, the first quarter was quite muted. But July onwards, activity picked up. I believe the second half will be stronger than the first, supported by domestic flows, interest rate cuts feeding through, and festive season momentum.
What about tech IPOs? Many large digital companies are waiting in the wings.
There’s definitely room for more digital IPOs. India doesn’t yet have enough listed tech plays compared to the US or China. With UPI and the digital ecosystem, the enabling infrastructure is very strong.
The first flush of IPOs in 2021–22 gave the market a playbook. Some companies struggled, but others delivered. Investors have made money in selective names, so there will be good interest in the next set of digital IPOs, provided companies demonstrate clear business models and profitability paths.
And QIPs? Do you see continued activity? In recent years, we’ve seen companies raise funds largely for deleveraging their balance sheet, is that trend changing?
QIPs will remain important, especially for banks and companies seeking growth capital. Over the last several years, a big theme has been deleveraging, but with GDP growth at 6.5–7 percent, corporates need capital to fund working capital and capex. That’s reflected in how capital goods and manufacturing stocks have done well, it’s a sign that the capex cycle is alive.
You’ve recently received an NBFC license. What’s the strategy here?
Our journey has always been about building distribution. We started with private equity, then public markets. Now we are scaling up wealth. We already manage around Rs 20,000 crore in wealth AUM (assets under management). Last year, we made an acquisition and will continue to grow both organically and inorganically.
The NBFC is meant to complement this. It’s a wealth-focused NBFC. Many clients who park wealth with us also need liquidity solutions. By offering leverage against their wealth portfolios, we enable them to deploy more capital effectively. So, it’s about strengthening the wealth ecosystem.
What are the targets for the wealth and asset management businesses?
We don’t set arbitrary targets, but we expect this to become a large business for us. Our approach is always judicious growth, both organic and inorganic, but wealth will remain a big focus area.
Are there any plans for taking Equirus to the public markets?
We’ve never raised external capital in a big way. Our model has been very capital-light. Today, apart from institutional investors like the Rakesh Jhunjunwala family, Amicus Capital and Federal Bank, we have about 150 shareholders, many of them employees.
But as we become a more robust platform, the next logical step is the capital markets. In the next 12 to 18 months, we will seriously look at an IPO. Of course, we want to stabilise the NBFC business and consolidate other areas first. But yes, an IPO is on the cards.
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