The capital markets could see another record-breaking year in 2026, with fundraising through initial public offers (IPO) expected to surpass that of 2025. However, market volatility, valuation and gains following the listing of shares remain key concerns.
Market observers estimate a pipeline of over ₹2.65 lakh crore to be raised by companies already holding or awaiting Sebi approval, excluding some major names such as Reliance Jio and Flipkart, which are expected to further increase the numbers.
Data compiled by Motilal Oswal shows that in 2025, 364 companies have raised an aggregate amount of ₹1.95 lakh crore, which is higher than 333 companies raising ₹1.72 lakh crore in 2024. Of the 364 companies, 106 companies were listed at the two major exchanges (mainboard IPOs), raising 94 per cent of the total fund raise amount.
The biggest IPO of the year was from Tata Capital, raising ₹15,511.87 crore, followed by HDB Financial Services (₹12,500 crore), LG Electronics India (₹11,607 crore), ICICI Prudential Asset Management (₹10,602.65 crore), Hexaware Technologies (₹8,750 crore), comprising the top 5 IPOs during 2025.
“In September 2025, India set a three-decade record for IPO activity, with 25 companies raising ₹13,302 crore, marking the highest monthly tally since January 1997.
“Looking ahead to 2026, the IPO pipeline appears deep and diversified, with tech-unicorns, PE-backed companies and a steady slate of Indian issuers preparing for listings, including Reliance Jio, Flipkart and PhonePe, amongst others. Overall, with a robust pipeline, supportive regulatory framework and sustained domestic liquidity, the primary market is likely to remain active and witness continued momentum through 2026,” said Sneha Poddar, vice-president – research, wealth management, Motilal Oswal Financial Services.
“While the possibility of another record year cannot be ruled out, it will largely depend on global macro conditions, interest rate trends and whether valuation remain within a range that both issuers and investors find acceptable,” said analysts at Bajaj Broking.
Domestic interest
Analysts point to a strong interest from domestic institutional investors in the IPO market, contributing roughly 70-75 per cent of the total IPO capital. Within domestic investors, mutual funds, insurance companies, pension funds and other domestic institutions together accounted for nearly half of the overall demand. Retail investors, however, remained cautious, with the average number of applications declining to 14.99 lakh in 2025 compared with 18.87 lakh in 2024, data from Prime Database group showed.
Overseas investor participation was constrained by global uncertainty, higher yields in developed markets and macro-driven risk aversion toward emerging markets.
Anchor investors collectively subscribed to 35 per cent of the total public issue amount. For the first time, mutual funds overtook FPIs as anchor investors, with their subscription amounting to 14.44 per cent of the issue amount, with FPIs at 13.99 per cent.
Listing gains
Average listing gain (based on closing price on listing date) decreased to 10 per cent in 2025, in comparison to 30 per cent in 2024. Around 37 out of the 102 IPOs, or 36 per cent, gave a return of over 10 per cent, in comparison to 67 per cent such IPOs in 2024. As on December 24, 54 of the 102 IPOs tracked by Prime Database were trading above the issue price.
“The weaker post listing outcomes reflected valuation pressure and macro headwinds amid a broader consolidation phase in the market, Aggressive pricing at the
top end of issue bands has
left limited room for upside and subdued secondary market returns have further weighed on performance,” said Poddar.
“Overall, the 2025 IPO experience reinforces that in a more discerning market environment, long-term fundamentals, reasonable valuations and business quality, rather than headline subscription numbers, are becoming the key determinants of sustainable post-listing performance,” she said.
More reforms
Sebi has introduced several changes to the IPO rules in 2025, including recalibration of minimum public offer requirements, bigger anchor book size, ESOP flexibility for start-up promoters. However, there is room for further streamlining processes and enhancing oversight.
“Moving gradually from an approval-heavy regime to a more disclosure-centric framework, particularly for companies with strong governance and clean regulatory records, can help shorten listing
timelines.
“Measures such as time-bound approvals, reducing repetitive disclosures in favour of material, sector-relevant information and a fast track route for low risk issuers would enhance predictability without diluting investor safeguards,” Poddar said.
“We feel every IPO book running lead manager should be held accountable for any fraudulent activity/accounting manipulation/inaccurate business model depiction. Sudden profits emerging in quarters before IPO, sudden drop in share price after listing, sales by pre-IPO/anchor investors on the first possible day after lock-in period is over, should raise regulatory red flags,” said Akshay Gupta, director, Prime
Securities.