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The upcoming auction of 3G mobile spectrum will also spur potentially billions of dollars in equity raising.

Morgan Stanley expects Indian firms to raise roughly $70 billion through share sales over the next three years, its India country head said on Wednesday.

Stake sales in state-run firms will account for $10-$15 billion of that, Narayan Ramachandran, who has been with Morgan Stanley since 1996, told the Reuters India Investment Summit.

The upcoming auction of third-generation mobile spectrum will also spur potentially billions of dollars in equity raising, although not necessarily from the public markets, he said.

"We will be raising between $20 billion and $40 billion per year, assuming markets hang in there," Ramachandran, who has 20 years of investment experience, said at Reuters' office in Mumbai.

Indian companies have raised about $18 billion in equity thus far this year. Morgan Stanley, which did not figure in the top 10 of Thomson Reuters equity capital markets league table in 2008, tops it this year.

Last year, Indian firms raised $7.2 billion in equity.

Morgan Stanley separated from its former India joint venture partner JM Financial in 2007 and has gone on to build a full-service investment bank, with sales and trading, fixed income, commodities, derivatives, research and asset management offerings and 400 employees in its onshore business.