Wall Street Bosses Look Past Pain Points to Ramp Up India Bets

Submission Statement: Across India’s small towns and bustling cities, retail investors have been snapping up shares of newly listed companies. It’s a boom that Blackstone Inc.’s President Jon Gray celebrates thousands of miles away in his Park Avenue office.

“For us, outside of the United States, India is the most liquid market — the easiest place to get an IPO done in the world this year,’’ Gray said in an interview. India already saw one of its biggest ever initial public offerings in recent weeks and a listing with a market value of more than $100 billion is possible from billionaire Mukesh Ambani’s empire, making the country one of the world’s busiest IPO markets.

Gray and other financial heavyweights acknowledge challenges like rising inflation and the falling rupee. Yet, between its private equity and real estate businesses, Blackstone has listed a string of companies over the past decade in India and revenue growth has been high, Gray said. The firm expects assets under management in the South Asian country to double to $100 billion in the coming years.

That’s a sign of the growing sophistication of the financial markets within this $4 trillion economy as it opens up further to foreign money. It’s also a dramatic turnaround from just a few years ago when private equity investors had limited options to exit investments in India, let alone at substantial profits. Now private equity, private credit and sovereign wealth funds are committing ever deeper pools of capital, while market makers like Citadel Securities LLC and hedge funds like Millennium Management LLC have built a presence there. Other parts of the financial industry are also changing swiftly.

In recent months, a string of Wall Street bosses have landed in India to court businesses and the government. Citigroup Inc.’s Jane Fraser had a meeting with Modi. JPMorgan Chase & Co.’s Jamie Dimon met the country’s finance minister. Both firms are working on the IPO of Ambani’s digital services giant Jio Platforms. That company is expected to go public later this year at a valuation that could make it India’s largest ever, Bloomberg News has reported.

Banks have been bolstering teams in investment banking and capital markets. Goldman Sachs Group Inc. has injected at least $500 million into its India banking franchise in recent years, Bloomberg News has reported. It’s also one of the banks on the Jio IPO.

The average fee paid to bankers in India has risen to 1.86% of an IPO’s value, according to capital-markets data provider LSEG. That’s higher than roughly 1.5% in Hong Kong.

The firms are all vying for a larger slice of the pie in what’s become one of the world’s most competitive investment banking markets. The Wall Street banks are competing against each other as well as Japanese ones and local firms like Kotak Mahindra Bank Ltd. and Axis Bank Ltd., who command deep client relationships and pricing power.

Brookfield Asset Management Ltd.’s CEO Connor Teskey says that over the next five years the firm’s investment in India will be more than $100 billion from about $30 billion in 2025. It’s a bet on “India’s immense scale, strong economic growth, respect for capital and growing demand for infrastructure,” he said.

The basic back-office centers that began in the 1990s have evolved into mission-critical cogs of global finance. India had more than 1,800 Global Capability Centers in 2025 and that is projected to exceed 2,400 by 2030, according to a Dun & Bradstreet report.

While low-end jobs have been shifting to places like the Philippines, the sprawling Indian campuses house armies of quants, risk analysts, investment and tech staff.

GCCs are estimated to have generated around $100 billion in revenue last fiscal year. They have grown so much that some Wall Street giants have more employees in India than anywhere else outside the US. JPMorgan alone has around 60,000 people working at its India GCCs.

A new free market oasis called GIFT City is seeing a boom. Gujarat International Finance Tec-City is part of Modi’s push to develop a hub in India that can compete with major international cities. Foreign banks are seeing assets surge in this alternative low-tax center on India’s west coast. There, they are helping set up treasury operations for corporations, offering financing for international businesses and helping foreign clients trade. HSBC has built a $23 billion balance sheet in GIFT city in under six years, according to people familiar with the matter. Citi’s assets there are likely to reach $3 billion by the end of 2026 from about $350 million last December, its India CEO K. Balasubramanian said.

The hub is “central to the internationalization of India’s economy and to building a global financial hub onshore,” he said. “That makes it a big focus for Citi.”