Future of Investment Banking in India 

Investment banking in India is at an interesting point. In 2024, it brought in about $1.3 billion in fees, according to Business Standard. That’s still small next to regular commercial banking, but it plays a big role in helping companies go public, merge with others, raise money through debt, or reorganize their businesses. World Bank reports indicate that the Indian economy expands at a steady rate of approximately 7 to 8 percent annually. The rising economy affords Investment Banks the opportunity to increase their operations over time. This article explores the important factors that will influence the future of investment banking operations in India between 2025 and 2030.

1. Why India’s Investment Banking Sector is Set to Grow

The future of investment banking is promising as the economy is growing fast, more companies need capital. Both local and foreign investors are showing serious interest. Let’s break down the main drivers.

A. A Strong Economy Behind It All

India’s GDP grew by 8.2% in FY24, according to the World Bank. Consistent growth helps businesses expand, which means they need more money. This leads to more IPOs, more bond issues, and more deals for investment banks.

• The equity capital market (ECM) is booming. In 2024, companies raised $72.3 billion through IPOs and follow-ons. Big names from tech, manufacturing, and financial services led the way.
• On the debt side, more firms are looking beyond just bank loans. They’re tapping into bond markets, giving a push to debt capital markets (DCM).

B. India’s Markets Are Maturing

Financial markets have come a long way. India’s financial markets have matured significantly, forming a solid foundation for the future of investment banking.

• India’s mutual fund industry reached a record ₹66.7 trillion (about $794 billion) in assets under management as of August 2024, according to a report by Reuters. This rise suggests more Indian households are choosing to put their savings into the stock market.
• SEBI has relaxed rules for foreign investors—like simplifying disclosure norms. That’s helped attract more global money.

C. The Global Spotlight Is on India

With China’s economy slowing down, global investors are looking at India as the next big growth story.

• Inbound M&A deals went up by 18.7% in 2024, showing how much foreign interest there is in Indian companies.
• Private equity and venture capital flows are still strong, especially in late-stage startups and firms getting ready to list.

So, whether it’s a small tech firm going public or a global giant buying into an Indian brand, investment banks are right in the middle of the action. For startups gearing up to raise capital or launch an IPO, tools like a valuation calculator and pitch deck template can be valuable assets in preparing for early-stage funding.

2. Technology’s Role: AI, Blockchain, and Cloud Reshaping IB

A. AI & Automation: Smarter, Faster Banking

• AI helps banks operate their daily activities.
• Large datasets become a part of AI recognition algorithms that evaluate credit risks.
• Automatic systems through Algorithmic Trading enable improved and accelerated execution of trades.
• Chatbots, alongside Virtual Advisors, function as digital support agents for handling customer service needs and creating automated reports.

B. Blockchain & Digital Assets 

• A few banking operations adopt Blockchain technology as a gradual implementation method.
• The Digital Rupee provides secure, transparent, real-time transactions through its role as digital money for securities settlements.
• Trading financial assets through digital tokens occur continuously for Tokenized Bonds and Equity.

C. Cloud Computing: The Backbone of Digital Banking

• Cloud computing adoption has become a standard practice across multiple industrial sectors, particularly in banking institutions.
• Cloud systems enable banks to simplify their data management and risk assessment process through their storage capabilities.
• Cloud-based solutions enabled smaller banks to achieve financial savings.

The practice of storing data internationally raises security risks that cause significant concern.

3. Regulatory & Policy Shifts: SEBI & RBI Driving Change

A. SEBI’s Merchant Banking Reforms (2024):

• The Merchant Bankers Regulations underwent changes from SEBI during December 2024.
• Non-bank merchant bankers must only engage with basic activities which include M&As and IPOs.

B. RBI’s Monetary Policy and Fintech Developments:

• Under its April 2025 statement RBI announced a reduction of repo rate to 6%.
• The policy has been implemented to boost economic expansion during times of worldwide economic vulnerabilities.
• The Indian central bank engages in Digital Rupee (e₹) development to enable swift interbank transactions in financial market sectors.

C. Global Regulations Impacting India:

• The complete implementation of EU’s MiCA regulation for crypto-assets took effect on December 30, 2024.
• The European Union took a decision to postpone by a few years Basel III “Endgame” rules until January 2026 for synchronization with United States implementation schedules.

Also Read: Comprehensive Guide to Investment Banking Services for Startups and Enterprises

4. ESG & Sustainable Finance: A Growing Opportunity

A. Green Bonds and ESG Investing

• Green bonds reached $670 billion during the year 2024 at a global level.
• The sustainable debt market sees its biggest segment as green bonds.
• The Indian government launched its initial sovereign green bond issuance during January 2023 to achieve a successful funding of ₹16,000 crore corresponding to $2 billion.

B. SEBI’s Role in ESG Regulation

• Starting from the financial year 2022–23 SEBI required ESG disclosure reports from its top 1,000 listed companies.
• SEBI applied this requirement to all supply chain entities connected to the top 250 companies while establishing 2025–26 as the compliance date.
• The supply chain industry demanded further time to meet disclosure requirements so SEBI pushed back the deadline until 2026.

5. Competitive Landscape: How Investment Banks Compete with Other Players

Commercial Banks

Banks control the majority of the loan and deposit market sector. According to the Economic Survey 2024-25, industrial credit increased by 4.4%, while agricultural credit registered a 5.1% growth rate in FY24.

Asset Managers

The funds managed by asset management companies amount to ₹66.7 trillion, equivalent to $794 billion. Their main business segment involves investing the funds of wealthy clients alongside investment banks. Their market-moving activity is supported through voluminous buying and selling operations that maintain market activity.

Fintech Companies

These financial companies emerged from present-day technological advancements. In 2024, they raised around $1.9 billion. Electronic platforms enable these companies to provide loans for businesses while offering bond investment opportunities to the public. Fintech companies have implemented technology-based solutions that have drawn substantial financial operations from banks, investment firms, and tiny client segments.

Main Point

Investment banks must develop intercompany cooperation schemes with fintech enterprises to enhance their client outreach and service delivery. They also need to use their broad banking operations to acquire additional clients and manage larger transactions.

Conclusion: What Lies Ahead for India’s Investment Banking?

The India’s future of investment banking industry benefits from multiple strengths, which include:

• A healthy economy
• Better use of technology
• Support from regulators
• The interest in green finance and ESG initiatives

Various obstacles impact the sector, such as shifting global circumstances, regulatory uncertainties, and growing competition. With a committed focus and strategic decisions, along with strategic market relationships with both new and established players, Indian investment banks will maintain their advantageous market position.