India’s primary market saw strength in FY26, witnessing 153 IPOs that collectively raised Rs 2,01,442 crore, despite corrections in broader equity markets. HDFC Securities’ outlook for FY27 remains optimistic, emphasizing the sustained investor interest and confidence in India’s growth story amid global uncertainties and market volatility.
The report highlights India’s resilient macroeconomic fundamentals, projecting real GDP growth at around 6.5% for FY26-FY27, with nominal GDP expected to expand by 10-11%. Government-led infrastructure spending is crucial, with capital expenditure likely to constitute nearly one-third of total expenditure in FY27.
Inflation is anticipated to be around 4.5%, with a targeted fiscal deficit of 4.3%. However, external pressures persist, with the Indian rupee facing strain due to weak foreign direct investment inflows and ongoing foreign portfolio investor outflows, alongside a widening trade deficit.
Corporate earnings are expected to grow by approximately 10%, with varying performances across sectors. Sectors like banks, consumer discretionary, metals, and telecom are set to improve gradually, while the energy sector may experience some challenges. Valuations have corrected recently, especially in midcap and small-cap segments, though they remain above long-term averages.
Retail participation remains a significant market driver, with over 222 million demat accounts and more than 1.48 crore active equity traders in February 2026. Systematic Investment Plan inflows into mutual funds have stayed strong, surpassing Rs 30,000 crore annually, according to the report.
