By Business India Editorial

India could attract close to $10 billion in renewable energy investment next year, a bright spot as public markets remain largely shut to big-ticket capital raising, according to Bank of America Corp’s top executives in the country. 

Deals and investments will continue to flow into areas such as electric vehicles and green hydrogen, Kaku Nakhate, the lender’s president and India country head, said in an interview, as investors look to reflect the energy transition in their portfolios. “If you really have to get your ESG story right, and if you are into energy, then you can do large pieces of work in India,” Nakhate said.

Investors and companies attending the bank’s recent North American roadshow were impressed by the Indian government’s clear targets to achieve net-zero carbon, Nakhate said. 

“People take us seriously,” she said. “That’s why we are seeing more sustainability funds that want to invest in India.” 

The optimism is offset by the picture in initial public offerings. Though first-time share sale volumes plunged globally in the year to date, India’s decline of nearly 60 per cent versus the same period in 2021 outpaced the worldwide slump, data compiled by Bloomberg show. Bank of America doesn’t plan to make significant hires in the coming year in India, Nakhate said, as investment banks worldwide have cut back on staff and bonuses.

A local exception is Kotak Mahindra Bank’s investment banking arm, which is planning to hire about 20 bankers as it bets on a rebound in deals activity next year, Chief Executive Officer S Ramesh told Bloomberg News in an interview last month.

Large IPOs of $1 billion or more likely won’t return until the end of 2023 or into 2024, according to Subhrajit Roy, India head for global capital markets at Bank of America. 

Yet the market could see medium-sized listings as soon as the middle of next year, he said. “It is early days of a turn of risk appetite for both companies and investors,”