Secondaries Market Shifts in India: A Turning Point or a Temporary Reprieve?

The secondaries market in India has long been considered a fledgling asset class. However, recent developments suggest that it may be hitting an inflection point. Over the past year, several Asian mid-market funds have expanded their secondaries remit to India or launched new dedicated secondary vehicles.

One of the main drivers behind this shift is the growing number of Indian companies raising capital in public markets. The number of IPOs jumped by over one-third to 108 listings in FY2026. This trend has created opportunities for secondaries investors, but it also highlights the challenges faced by private market funds in India. Fundraising has declined for four consecutive years following a 2021 peak, attributed to regulatory tightening and aging funds putting pressure on general partners (GPs) to provide liquidity.

The current market volatility, triggered by the US-Iran war, has exacerbated these challenges. Several IPO hopefuls have delayed their listing plans. Despite these headwinds, secondaries players are cautiously optimistic about the market’s prospects. Sameer Nath, chief investment officer of 360 ONE Asset Management, a $74 billion AUM Indian firm, recently stated that his company “loves this market.” He highlighted the potential for secondary deals to offer more attractive pricing than IPOs, citing an example of a hospital asset expected to fetch three times its current value through an IPO later this year.

The growing sophistication of the secondaries market in India is evident in the rise of GP-led transactions and continuation vehicles. These complex deals often require the expertise of bulge-bracket firms such as HarbourVest Partners and TPG NewQuest, which are increasingly leading these transactions. While these deals remain relatively rare for now, experts predict that they will become more common as the ecosystem matures.

Regulatory tightening has been a key factor driving demand for secondaries solutions in India. The government’s efforts to strengthen primary fund rules have created an environment where GPs are under pressure to provide liquidity to aging funds. This has led to increased interest from pre-IPO secondaries investors. However, regulatory overreach can also stifle innovation and investment in the private markets.

The surge in Indian IPOs has been touted as a boon for secondaries investors, but it highlights the challenges faced by private market funds. While these companies raise capital through public markets, their peers in the private markets continue to struggle. This double standard raises questions about the sustainability of India’s economic growth story. Can the country truly achieve its ambitious targets without addressing fundamental issues plaguing its private markets?

The secondaries market shift may be a temporary reprieve for investors, but it is also a symptom of deeper structural challenges that need to be addressed. The inflection point in the secondaries market has been driven by a combination of factors, including regulatory tightening, aging funds, and the growing sophistication of GP-led transactions.

However, this shift may not necessarily signal a permanent turning point for the private markets in India. Rather, it may represent a temporary reprieve for investors who are taking advantage of the market’s current volatility to execute secondary deals at attractive prices. As the regulatory environment continues to evolve and aging funds remain under pressure, it is unclear whether this trend will persist or ultimately give way to more fundamental structural issues.

Ultimately, the secondaries market shift in India serves as a reminder that economic growth is not solely driven by regulatory tinkering or short-term market fluctuations. It requires sustained investment in human capital, infrastructure, and innovation – all of which are essential for fostering a robust and dynamic private market ecosystem.