Characterized by volatility and uncertainty, 2025 saw several waves of market turmoil. South Asia, inevitably, finds itself embroiled in the jolt, with the region’s GDP growth expected to moderate to 5.6%, according to the United Nations Economic and Social Commission for Asia and the Pacific.

Still, key markets in the region continue to display resilience. In India, the solid momentum fuelled another fruitful year in the stock market following the record-breaking 2024. Nifty 50 culminated 2025 in a 10% gain, and the capital-hungry enterprises drove an unprecedented surge of initial public offerings (IPOs), with over 300 new companies going public throughout 2025, beating the previous record of 268 in 2024.

Small and medium-sized enterprises drove most of the new listings, according to Ernst & Young (EY), while mainboard debuts helped push IPO proceeds to US$22.9 billion. That haul narrowed the gap with global financial hubs like Hong Kong and New York. Yet in post-market trading, worries over inflated valuations quickly surfaced, fuelling sharp swings in share prices.

A significant driver of the Indian IPO momentum was the strong exit pipeline in private equity (PE), which surpassed US$36 billion across the first three quarters in 2025, according to EY, and is on track to rise above the level in 2021 when activities peaked at US$40 billion. The unique momentum in India also bucked the global deal drought, which saw a sharp decline in deal count by 30%.

However, PE capitals were holding back on new commitments, EY notes, investing merely US$49.3 billion across the first 11 months, down 12% year on year. Despite tariff headwinds, Morgan Stanley expects unicorn companies to fuel the market with world beating growth, as the country steps up efforts to cement its role as a private investment hub.

PE sponsors in India also established a solid base for a threefold yearly surge in mergers and acquisitions (M&A), according to S&P Global Market Intelligence, hitting US$5.1 billion in 2025. Buoyed by domestic consolidation and cross-border acquisition, M&A in India, EY estimates, will be underpinned by sectors like pharmaceuticals, technology and consumer in 2026.

Private credit in India also took centre stage with a 53% year-on-year surge during the first half of 2025, according to EY, owing to the soaring demand for flexible financing structure and rapid capital deployment among large borrowers from sectors like infrastructure, real estate and healthcare.

The abundance of robust investment opportunities has drawn a massive amount of global capital to India’s private credit market in 2025, a trend reflected in the substantial foreign inflows, which represent over half of the total investment in H1.

India’s fixed income market remained resilient, with local currency issuance gaining traction amid a weaker rupee. Institutional issuers, such as the Export-Import Bank of India and the State Bank of India, led activity, while corporate issuers were active in sectors like those of real estate investment trusts, non-bank financial institutions and renewable energy.

As well, robust appetite for green financing in India stood impervious to the shifting global narrative, bolstered by stable green and sustainable bond issuance over 2025, a proof of the consistent and progressive maturation of the market.

Beyond India, other financial markets in South Asia underwent pivotal shifts, with the sukuk market being a keen focus of expansion in Pakistan. The sustainable issuances in the country were put on a strong footing with backing from multilaterals. It’s stock equity market also gained market favour by delivering a 51% gain, accompanied by a fairly active IPO market.

Despite ongoing political instability, issuers in Bangladesh managed to execute several key transactions in the equity and fixed income markets, with fundraising activity largely driven by corporates.

These were some of the notable trends the board of editors of The Asset observed in the South Asia region during the review period for The Asset Triple A Sustainable Finance Awards 2026.

For the complete list of the best banks and advisers in South Asia, please click here.

For the complete list of the best deals in South Asia, please click here.

For more information about the awards gala scheduled for March 31 2026, please contact us at celebrate@theasset.com.