IPO, QIP fundraising to touch Rs 3 lakh crore in 2025: AIBI chairman Lunawat

Lunawat added that the IPO pipeline for 2025 reflects a wide spectrum of participants, from startups and SMEs to large multinational corporations (MNCs).

India's capital markets are expected to witness another strong year of fundraising in 2025 with initial public offering (IPO) and qualified institutional placement (QIP) activity set to reach as much as Rs 3 lakh crore again after a stellar 2024, said Mahavir Lunawat, chairman, Association of Investment Bankers of India (AIBI), in an interaction with Moneycontrol.

In 2024, companies raised Rs 1.67 lakh crore from mainboard and SME IPOs and Rs 1.36 lakh crore from QIPs.

Lunawat predicted that the country will see significant new share sales in the next two years, with as many as 1,000 IPOs likely to hit the market in this period, far outpacing the 851 IPOs recorded in the last six years.

“This surge will add approximately 20 percent to the market's capitalisation,” said Lunawat.

Lunawat said that the Indian market has the potential to see Rs 4-5 lakh crore of capital raising through IPOs and QIPs in the coming years.

Also read: NSE leads Asia in IPO count in 2024, sets global record for equity capital raised in primary market

Driving this growth is a convergence of factors, chief among them investor appetite, borne out by a record numbers of demat account openings, a steady flow of retail savings into systematic investment plans (SIPs), and heightened interest in primary markets.

"We are witnessing a shift where investors increasingly favour IPOs over secondary market opportunities due to valuation dynamics and market volatility," he said.

Lunawat added that the IPO pipeline for 2025 reflects a wide spectrum of participants, from startups and SMEs to large multinational corporations (MNCs).

“A notable trend is the entry of mid-market businesses, which traditionally relied on private placements or pre-IPO rounds but are now opting directly for public listings. This shift underscores the accessibility and maturity of India's capital markets,” he said.

“Global corporations like Hyundai and LG are exploring India's markets for their fundraising needs, signalling a reversal of earlier trends. India is increasingly becoming a preferred destination for MNC IPOs due to its robust regulatory framework and expanding market depth," added Lunawat.

Lunawat said that the Securities and Exchange Board of India (SEBI) has been instrumental in fostering this growth of the primary market. Enhanced disclosure norms, streamlined regulations and continuous engagement with market participants have bolstered investor trust, he said.

"SEBI has struck a balance between facilitating market growth and ensuring transparency, which has been pivotal in attracting both domestic and foreign investors," he said.

Recent regulatory developments, such as categorisation of merchant banks and improved SME listing norms, will further strengthen the ecosystem, he said.

He added that while there have been some concerns around SME IPOs, the segment continues to thrive, with the average issue size rising from Rs 10-12 crore five years ago to Rs 39 crore in 2024.

“These IPOs play a crucial role in promoting entrepreneurship, employment generation and market inclusivity. SME platforms have become a backbone for India's economic growth, empowering small businesses to scale up," he said.