Block Deals Set to Surpass IPOs in FY26, Says Nomura's Natarajan

Activity picked up sharply from April, with IPOs totaling about $7 billion so far this financial year. Mahesh Natarajan, Head of equity capital markets at Nomura

- Dipti Sharma

Blocks look set to surpass initial public offerings (IPOs) in fiscal year 2026 (FY26), says Mahesh Natarajan, head of equity capital markets (ECM) at Nomura, who has around two decades of experience in the segment.

"Last year, blocks totaled approximately $17 billion; this year, we're already at approximately $13 billion. The key is confidence: issuers now believe large transactions can be absorbed, and investors are comfortable with bigger blocks," Natarajan said, referring to block deals, or a transaction for a large quantity of shares of a listed company.

The real challenge is extreme volatility; it pauses markets, he explained. When the volatility index crosses the 20 level, there is a pause, for instance, during the national election results week or the Indo-Pakistan strikes. When the volatility index is below 20, it's mainly about pricing, not demand," Natarajan added.

Edited excerpts:

Just to gauge sector and investor traction—which sectors are seeing high interest?

Industrials, especially manufacturing and renewables, certain pockets of consumer and healthcare, such as single specialty and technology players with AI (artificial intelligence) tailwinds, are seeing investor focus. In the case of financials, banks—specifically large-cap banks—and select financials, especially those with a track record of consistent execution, are attracting investor appetite.

Are there sectors that you are currently avoiding?

It's not about sectors but about specific business models—whether it's the company's size, stage of evolution, transient volatility or ongoing restructuring. In these cases, we don't avoid them, but we advise waiting until things are sorted before tapping the market.

The first quarter of this calendar year (January-March) was slow, with very few large deals. Activity picked up sharply from April, with IPOs totaling about $7 billion so far this financial year.