India is considering an 8-10 per cent increase in its FY25 capital expenditure from the previously allocated Rs 11.11 lakh crore. This potential rise is attributed to higher-than-expected tax revenue and a record surplus transfer by the Reserve Bank of India (RBI), according to a recent report by the Pantomath Group, a homegrown financial conglomerate.
The June election outcome has bolstered optimism for policies and reforms, which supports a positive medium to long-term outlook for Indian equities. Notably, the country’s stock market capitalisation surpassed $5 trillion for the first time in the second quarter of this year, marking India as the fifth country to achieve this milestone after the US, China, Japan, and Hong Kong.
Favourable market conditions, high liquidity, a conducive growth environment with stable interest rates, and benign inflation have created a booming IPO market. Mahavir Lunawat, Managing Director of Pantomath Capital Advisors, stated that the IPO market is expected to experience a stronger pull post-budget, positioning India as a new equity funding frontier for global corporations.
India’s primary market is anticipating a bustling period ahead, with 55 companies planning to raise over Rs 68,000 crore through IPOs. In the first half of 2025 alone, around 35 IPOs raised approximately Rs 32,000 crore, with an impressive average subscription rate of 61 times.
The real estate market is also set for robust growth, driven by government policies and urbanisation. The sector will require Rs 14 lakh crore ($170 billion) in debt financing from 2024 to 2026.
Major cities like Mumbai, NCR, and Bengaluru are expected to benefit significantly, with construction finance and lease rental discounting (LRD) anticipated to increase by 40 per cent over the next three years.
In the cement sector, major players are expanding through inorganic acquisitions, expecting a 6–7 percent compounded growth in the coming years. The top five players are set to dominate over half the market by March 2025.
The FMCG sector is witnessing a recovery in business from rural regions. For the first time in several quarters, companies are providing positive guidance for the next two quarters.
This optimism is based on factors such as a normal monsoon, robust rabi crop, bumper wheat crop, and government measures like an increase in the minimum support price (MSP) and higher spending on MNREGA.
In the automobile sector, India may introduce the Faster Adoption & Manufacturing of Electric Vehicles (FAME) 3 scheme in the upcoming budget to encourage the sale of electric vehicles. The scheme is expected to support electric two, three, and four-wheelers, with a potential budgetary allocation of about Rs 10,000 crore.
This multifaceted growth across various sectors indicates a strong economic trajectory for India, backed by favourable policy measures, robust market conditions, and strategic government initiatives.
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