Contrary to popular perception, Indian IPOs are very fairly priced now: Axis Capital MD Suraj Krishnaswamy

Suraj Krishnaswamy, Axis Capital

While 2025 has been a record year for IPO (initial public offering) fundraising, with more than Rs 1.75 lakh crore being raised, the average listing day gains have witnessed a moderation, compared to last year. In a recent interaction with Moneycontrol, Suraj Krishnaswamy, Managing Director, Investment Banking, Axis Capital, said that declining IPO listing gains should not be mistaken for aggressive pricing, arguing that Indian IPOs are far more fairly valued today than during the 2020–22 boom.

Listing pop, he noted, is a poor barometer of pricing discipline. He expects IPO fundraising of Rs 1.5 lakh crore to remain the baseline in 2026, with technology-led issuances, rising QIP (Qualified Institutional Placement) activity in core sectors, and continued momentum in block deals and InvITs.

Edited excerpts:

We have seen IPO fundraising cross Rs 1.5 lakh crore in the last two calendar years. Is that the new normal now? What is your outlook for the coming year? 

I would say Rs 1.5 lakh crore is no longer an anomaly—it is becoming the baseline for India’s IPO ecosystem. What is interesting about this year is that the first half saw minimal IPO activity due to tariff-related uncertainties,. So, most of the action was concentrated between June and November. Despite that compressed six-month window, we’ve matched previous years’ fundraising levels. Looking ahead, with the number of high-quality IPOs in the pipeline, we’re confident that 2026 will at least match, if not surpass, the figures we saw in CY24 and CY25.

IPO market is firing on all cylinders, big block trades are happening every week, but QIP market seems subdued, except for one big SBI trade. Why is that so? Do you expect QIPs to pick up in 2026?

It really depends on the sector of companies which are getting listed. Nearly 60 percent of IPO fund raise were OFS (offer for sale), and block trades are equivalent to this. QIPs traditionally happen in BFSI (Banking, Financial Services an Insurance) , Auto, Industrials and allied sectors. Pharma, Consumer and Tech sectors usually do QIPs only opportunistically, in case of acquisitions. The Infrastructure and Real Estate sectors largely operate through InvITs/REITs (Real Estate Investment Trusts) these days and there has been quite a bit of follow-on activity there.

We expect more QIPs in CY26 in the traditional sectors as Banks and NBFCs (Non-Banking Financial Companies) are priming up and India Inc is looking for acquisitions

What is your take on pricing discipline in IPOs? Average listing gains have been coming down. Is this because of aggressive pricing or market volatility?

Contrary to popular perception, Indian IPOs are very fairly priced now vis-a-vis 2020-2022.  Listing gains in India are not a barometer of fairness in IPO pricing. India has unique dynamics with respect to high retail and HNI (High Net-worth Individual).participation. Also bookrunners aren’t allowed to do market making in India unlike the US where underwriters are allowed to place stabilising bids.

This year's record IPO activity has been driven by tech IPOs. Will tech IPOs form a major part of the IPO market in 2026, too? Which other sectors do you see driving the 2026 IPO pipeline?

Larger IPOs will continue to be from the Tech industry with some large IPOs from Renewable, Healthcare, BFSI and Consumer sectors in the mix. This will skew the fund raise percentage towards technology. We expect deals to continue unabated as SIP inflows continue and it requires good quality papers to be available in the market

Do you see MNCs continuing to monetise their Indian subsidiaries through IPOs in 2026?

Undoubtedly, LG’s India listing, which Axis had led, was a huge success for both the shareholders and incoming investors. Success breeds more success and we are already handling  a couple more MNC (Multinational Corporation) -led India listings.

The Indian market has matured and the Securities and Exchange Board of India (Sebi)-led regulatory overhaul over the last few years has really given confidence to the global stakeholders on the stability of Indian regulations. The coming of age of Indian MFs (Mutual Funds), AIFs (Alternative Investment Funds) and insurance companies has also helped as the depth of the market is unrecognisable from 3-4 years ago.

What’s driving the recent rush of domestic investor interest in InvITs (Infrastructure Investment Trusts) ?

Issuers, bankers and SEBI have done a fabulous job in ensuring the product is perceived risk-free by the investors.

Retail and HNIs's hurdle rate expectations have changed. It is now being compared with G-Secs and even FDs. So a risk-free double digit return is being seen as comparable. Wealth managers are also recommending this product to their clientele in place of other fixed income products. Amongst the institutional investors, insurance companies, banks and corporate treasuries, which do not have access to such a product, are lapping it up big time.

There are several InvIT IPOs that are expected next year. Are InvITs, as a product, suitable for retail investors? Are retail investors today more aware of the nature of hybrid products like InvIT?

It should be part of every retail investor’s capital allocation.

I have personally seen the product evolve, post 2017, when the IPOs even had a grey market premium (for a yield product!). At every stage, the issuers and bankers have sat with the regulators (Sebi, IRDAI) to help change the regulations to enable more institutional participation which has led to a stage where we are raising Rs 20,000 crore this year in InvITs and another Rs 10,000 crore in REITs.

Proactive regulatory interventions have really helped this product and a lot of kudos should go to the regulators for this. As more infra asset classes come into InvITs, this sector is only going to continue to grow.

We expect more Public InvITs than private, due to the prevailing interest rate and exchange rate situations, which makes the Indian investor more attracted to this product vis a vis foreign ones.