Blackstone’s Jonathan Gray Says India’s Market Liquidity Is Among the World’s Best

India has emerged as one of the world’s most active capital markets, attracting attention from global investment firms, international banks and private equity funds. Blackstone President Jonathan Gray has described India as the most liquid market for the firm outside the United States, highlighting the country’s growing ability to support large initial public offerings (IPOs) and provide exit opportunities for investors.

Gray’s assessment comes as India’s financial markets expand through retail participation, domestic institutional investment, private equity activity and a busy IPO pipeline. Blackstone expects its assets under management in India to double to $100 billion in the coming years, reflecting its confidence in the country’s longer-term investment opportunities. However, the outlook also comes with challenges, including rupee depreciation, inflation, foreign portfolio outflows and regulatory scrutiny of certain trading activities.

Key takeaways

• Blackstone’s assessment: Jonathan Gray considers India its most liquid market outside the United States and highlights its ability to execute IPOs.
• Investment target: Blackstone expects its assets under management in India to reach $100 billion in the coming years.
• IPO activity: Strong investor participation and the possibility of large listings are increasing India’s importance in global capital markets.
• Domestic capital: Retail investors and domestic institutions are helping deepen the market.
• Foreign investment: Private equity, private credit, investment banking and real estate remain important areas of international interest.
• Challenges: Currency weakness, inflation, foreign investor selling and regulatory risks continue to affect market conditions.

Why Blackstone’s Jonathan Gray Is Highlighting India’s Market Liquidity

Market liquidity refers to how easily financial assets can be bought or sold without causing substantial changes in their prices. In the context of capital markets, liquidity also reflects the availability of investors, trading activity and the ability of companies to raise capital or sell shares to the public.

Gray’s remarks focus particularly on India’s ability to execute IPOs. A company planning a public listing needs sufficient investor demand, underwriting capacity, regulatory infrastructure and market participants willing to purchase its shares.

India’s growing retail investor base and expanding institutional participation have helped create a broader pool of potential buyers. This can make it easier for companies and existing investors to access the public markets, although the success of an individual offering still depends on its valuation, business prospects and prevailing market conditions.

Gray said India was the easiest place outside the United States to get an IPO completed in the world that year. His comments highlight the practical advantages of India’s capital markets for a global investment firm seeking to realise returns from its investments.

Liquidity is particularly important for private equity investors. These firms typically invest in businesses for several years before seeking an exit through a stock market listing, a sale to another company or a transaction with another financial investor.

A functioning IPO market gives private equity firms another route to sell their holdings and return capital to investors. When exit opportunities improve, investment firms may find it easier to deploy new capital because they have a clearer potential route to monetising existing investments.

However, strong IPO activity does not guarantee that every listing will perform well. Market conditions can change quickly, and an offering may be delayed, repriced or withdrawn if investor demand weakens.

India’s IPO Market Is Becoming More Important

India’s IPO market has become an important channel for businesses seeking capital and early investors looking to sell shares. Companies can use IPO proceeds to finance expansion, reduce debt, invest in technology or strengthen their balance sheets. Existing shareholders may also sell part of their holdings during an offering, depending on the structure of the transaction.

For investment firms such as Blackstone, the market provides opportunities to realise returns from portfolio companies and potentially recycle the proceeds into new investments.

The possibility of large listings has added to the market’s visibility. A potential listing of Jio Platforms, the digital services business associated with Reliance Industries, has been discussed as a possible landmark transaction. Its eventual size, timing and valuation remain subject to the company’s decisions and market conditions.

Large offerings can attract international attention, but the depth of a market cannot be measured by headline IPO values alone. Trading volumes, the diversity of investors, the availability of institutional capital and the ability to absorb new share supply are also important.

A market with strong liquidity can help companies raise capital and provide existing shareholders with exit opportunities. A market that relies heavily on short periods of enthusiasm, however, may experience volatility when sentiment changes.

For India, sustaining market depth across different economic conditions will be as important as attracting large listings during favourable periods.

Domestic Investors Are Strengthening India’s Capital Markets

One of the important developments behind India’s capital-market expansion is the growing participation of domestic investors.

Retail investors have increasingly accessed financial markets through digital brokerage platforms, online account opening and simplified investment services. Mutual funds and other domestic institutions also provide a channel through which household savings can enter equity and debt markets.

This wider investor base can support liquidity by creating demand that is not entirely dependent on foreign capital. Domestic participation can also help companies access funding when international investors become more cautious.

The growing financialisation of household savings is relevant here. Financialisation refers to the movement of savings into financial products such as shares, mutual funds, bonds and insurance-linked investments rather than keeping most savings in cash or traditional deposits.

As more households participate in markets, companies may gain access to a larger pool of capital. Investors, in turn, receive more opportunities to participate in business growth, although they also take on market risk.

The expansion of domestic participation does not eliminate volatility. Retail investors can respond quickly to changes in sentiment, and domestic institutions may not always be able to offset large foreign selling.

Nevertheless, a broad investor base can make the market more resilient than one that depends disproportionately on a narrow group of international investors.

Blackstone’s India Investment Strategy

Blackstone is one of the world’s largest alternative investment managers, with operations spanning private equity, real estate, credit and other investment strategies.

The firm has built a substantial presence in India across sectors including commercial real estate, logistics, technology services and manufacturing. Its investment approach has included acquiring stakes in businesses, expanding their operations and seeking exits through sales or public listings.

Gray’s expectation that Blackstone’s assets under management in India could double to $100 billion over the coming years signals the firm’s intention to expand its exposure to the country.

Assets under management, or AUM, refers to the value of assets an investment manager oversees on behalf of clients and investors. It is not the same as the manager’s own balance-sheet assets, annual revenue or profit.

An increase in AUM could reflect new fundraising, additional investments, the growth in value of existing holdings or a combination of these factors. The pace of expansion will depend on the firm’s investment opportunities, available capital and the returns it expects from potential transactions.

India’s domestic consumption, infrastructure requirements, expanding services sector and growing demand for commercial property provide potential investment opportunities. The country’s capital markets also offer an avenue for investors to exit businesses after improving their operations.

Yet the strategy carries risks. Acquisitions can be expensive, currency movements can affect returns measured in dollars, and the eventual sale of an investment may take longer than anticipated.

Gray has acknowledged the challenges posed by inflation and rupee depreciation while pointing to underlying demand in parts of Blackstone’s Indian portfolio.

Private Equity and Private Credit Are Expanding

India’s investment landscape is no longer limited to conventional public equities and private equity transactions. Private credit has also become an important area of interest for global investment firms.

Private equity generally involves taking ownership stakes in businesses, while private credit involves lending outside conventional public bond markets or standard bank lending channels. These strategies serve different purposes but can both provide capital to companies seeking expansion funding.

Private equity firms may invest in a business, improve its operations and eventually sell their stake. Private credit funds may provide loans to companies that need financing for acquisitions, expansion, refinancing or other corporate requirements.

India’s growing business sector and infrastructure needs create opportunities for both forms of investment. A deeper capital market can also make it easier for private credit investors to assess potential exits or refinancing options.

However, private credit is not without risks. Borrowers may struggle to repay loans, and privately negotiated debt can be less liquid than publicly traded securities. Investors must assess credit quality, collateral, interest rates and repayment capacity.

For India, the expansion of these funding channels could broaden the range of financing available to businesses. The long-term benefits will depend on lending standards, investor protections and the ability of companies to use capital productively.

Global Banks Are Increasing Their Focus on India

India’s growing capital markets have created opportunities for international investment banks in underwriting, mergers and acquisitions, financing and other advisory services.

When a company plans an IPO, banks may help prepare the offering, coordinate investor demand, determine pricing and distribute shares. Larger transactions can generate substantial advisory and underwriting fees, attracting competition among domestic and international financial institutions.

International banks are also expanding their capital-markets and investment-banking capabilities to serve Indian companies and overseas businesses operating in the country.

The growing presence of global financial firms can improve access to international investors and financing networks. It may also bring additional expertise in transaction structuring, risk management and capital raising.

Domestic banks and financial institutions remain important competitors because they have established relationships with local companies and a detailed understanding of the Indian market.

The result is a more competitive financial-services environment, with firms seeking opportunities across public listings, corporate transactions and institutional investment.

Global Investors Still Face Significant Challenges

Despite the enthusiasm surrounding India’s capital markets, the investment outlook is not free of risks.

Rupee depreciation can reduce the dollar value of returns earned by foreign investors when those returns are converted back into US currency. Even if an investment increases in rupee terms, currency movements can weaken the investor’s final dollar-denominated return.

Inflation is another concern. Higher prices can increase operating costs for businesses, reduce household purchasing power and influence interest-rate decisions. Higher borrowing costs can affect company valuations and the economics of new investments.

Foreign portfolio investors have also withdrawn substantial capital from Indian equities during 2026, reflecting a combination of global investment preferences, market performance and currency concerns.

Portfolio investors typically buy and sell publicly traded securities, while private equity firms generally invest over longer periods in privately negotiated transactions or substantial ownership stakes. Their behaviour can therefore differ: foreign investors may sell listed shares even as long-term investors continue evaluating private-market opportunities.

This distinction helps explain why confidence in India’s long-term growth prospects can coexist with short-term selling in its stock market.

India’s markets also remain smaller than China’s by overall market size, while corporate taxes and regulatory requirements can affect investment returns and transaction timelines.

For global investors, the key question is not simply whether India offers growth opportunities. It is whether those opportunities can generate competitive returns after accounting for valuations, taxes, currency movements and execution risks.

Retail Participation Brings Opportunities and Risks

The expansion of retail participation has helped deepen India’s capital markets, but it also creates challenges for regulators and investors.

More individuals are participating in equities and derivatives through digital platforms. While broader participation can improve market depth, complex products can expose inexperienced traders to significant losses.

Equity derivatives, including futures and options, allow participants to take positions based on the expected movement of an underlying asset. These instruments can be used for hedging or speculation, but leverage can magnify losses.

Regulatory scrutiny has increased around retail participation in derivatives after large aggregate losses among individual traders. Authorities face the challenge of allowing markets to develop while ensuring that participants understand the risks of complex products.

Liquidity and market quality are not identical. A market can have high trading volumes while still exposing participants to excessive leverage, sharp price movements or risks arising from concentrated trading activity.

The long-term strength of India’s capital markets will therefore depend on investor education, effective supervision, transparent disclosures and reliable trading infrastructure.

GIFT City Could Support India’s Global Financial Ambitions

Gujarat International Finance Tec-City, commonly known as GIFT City, is another part of India’s effort to strengthen its role in international finance.

The financial hub is designed to support cross-border financial services, including banking, investment management, financing and international transactions. Its development aims to provide a domestic location through which businesses can access selected international financial services.

For global banks and investment firms, GIFT City may offer opportunities to establish treasury operations, serve overseas clients and conduct eligible cross-border business.

The centre’s growth could complement India’s domestic capital markets by expanding the range of financial services available within the country.

However, building an international financial hub requires more than tax incentives or modern infrastructure. It also depends on regulatory clarity, legal certainty, access to skilled professionals and confidence among international institutions.

GIFT City’s progress will therefore be one of several factors shaping India’s ability to attract global financial activity.

What Happens Next?

India’s capital markets are likely to remain an important consideration for global investors as they assess opportunities in public equities, IPOs, private equity, credit and real estate.

For Blackstone, the stated ambition to increase Indian AUM to $100 billion indicates that the firm sees scope to expand its investments. Achieving that goal will depend on the availability of attractive assets, the ability to deploy capital at suitable valuations and the eventual performance of its portfolio.

The IPO market will remain a key indicator to watch. A sustained pipeline of listings, broad investor participation and successful exits could reinforce India’s appeal to international investment managers. Conversely, weak demand or a prolonged market downturn could delay transactions and reduce the value of potential exits.

Currency movements, inflation, regulatory developments and foreign portfolio flows will also influence investment decisions. These factors may produce different outcomes for public-market investors and long-term private-market funds.

Gray’s comments underline confidence in India’s ability to connect companies seeking capital with investors willing to provide it. Whether that advantage persists will depend on the depth of investor demand and the resilience of the market through changing economic conditions.

The Bigger Picture

Blackstone President Jonathan Gray’s assessment highlights the growing role of India’s capital markets in global investment strategies. Strong IPO activity, increasing domestic participation and expanding private-market opportunities have made the country more relevant to international financial institutions.

But liquidity is only one part of a successful investment environment. Sustainable returns also depend on corporate performance, valuations, currency stability, regulatory transparency and the availability of credible exit routes.

India’s challenge is to convert its growing investor base and capital-market infrastructure into durable financing opportunities for businesses. If it can maintain that progress while managing financial and regulatory risks, the country could strengthen its position as a major destination for global investment.

Frequently Asked Questions

1. What did Blackstone’s Jonathan Gray say about India’s market liquidity?

Gray said India was Blackstone’s most liquid market outside the United States and highlighted its ability to complete IPOs. His remarks reflected the growing depth of India’s capital markets and the availability of investor demand for public offerings.

2. What is Blackstone’s investment target for India?

Blackstone expects its assets under management in India to double to $100 billion in the coming years. AUM measures the assets overseen by an investment manager and is not the same as its revenue or profit.

3. Why is market liquidity important for private equity firms?

Liquidity gives private equity firms more opportunities to sell investments and return capital to their investors. IPOs are one possible exit route, alongside sales to other companies or financial investors.

4. What risks could affect India’s capital markets?

Key risks include rupee depreciation, inflation, foreign portfolio outflows, changing valuations, regulatory uncertainty and losses among retail participants using complex financial products. These factors can affect investment returns and the timing of new listings.