Financial markets are undergoing shifts. In the primary equity market, there is a surge of interest in small and medium enterprises (SMEs) IPOs, including from domestic mutual funds, with massive oversubscriptions.

About 54 per cent of IPO shares allotted to investors were sold within a week of listing, according to the Central Bank’s monthly bulletin.

“A growing number of listed companies are turning to qualified institutional placements (QIPs) for raising capital, estimated at around Rs 60,000 crore in the first eight months of 2024,” it read.

With intermittent corrections on global cues, benchmark indices in the secondary market have moved up, and the outlook remains bullish, said the RBI.

Global funds have been investing heavily in the Indian debt market for the fifth month in a row since May 2024. On the other hand, corporate debt issuances remained low during the financial year so far despite easing yields as issuers awaited the US rate cut.

The RBI said that as large risk capital investors tread cautiously, the early-stage investment landscape is seeing an increasing number of micro venture capital firms and founder-led funds.

Despite guardrails and concerns about interconnectedness with the regulated financial system, the footprint of private credit – non-bank lending in high-yielding and illiquid debt-like instruments - is gradually expanding to cater to customised requirements of borrowers that are underserved by traditional sources of capital.

Rough estimates place private credit assets under management at around $15 billion.

“Fintech lenders, which are reported to have captured over 52 per cent of the market share of personal loans, are increasingly turning to private credit to raise funds and diversify borrowing sources. The resilience of private credit in a credit downturn, however, remains untested,” the Central Bank said.