DIIs now drive IPO pricing, bring stability to markets: PeakXV’s GV Ravishankar

"Having the right DIIs on board is essential,” he emphasized. “They are no longer just participants—they are critical stakeholders in ensuring a company’s long-term success in the public markets."

The role of domestic institutional investors (DIIs) in India’s IPO market has never been more critical. With their growing influence and deep pockets, DIIs are now shaping pricing and ensuring market stability, said GV Ravishankar, Managing Director at PeakXV Partners, during a panel discussion at the Moneycontrol Global Wealth Summit 2025 in Mumbai.

"DIIs have become so much more important in the current scheme of things," he noted. “They can now write $200–300 million checks in a single IPO, making them key players in book-building. Their push for more attractive valuations means they have a significant influence on pricing."

Also read: Sensex snaps 2-day winning streak, Nifty holds 22,500 after volatile session amid US tariff concerns; IT, realty drag

Ravishankar sees this as a healthy shift, bringing balance to the IPO process. "It’s not about right or wrong—it’s just a good balance," he said, adding that DIIs’ presence has introduced much-needed liquidity and a sharper understanding of market dynamics. "They have better eyes on the ground, deeper knowledge, and play a crucial role in shaping a company’s public market journey."

Reflecting on past IPO experiences, he acknowledged that the journey has been a constant learning process. Some companies, he noted, went public too early. "We've seen firms list with Rs 500 crore to Rs 1,000 crore in revenue and modest profitability. At the time, it seemed sufficient, but not every IPO follows a smooth compounding trajectory."

He also added that unless a company is valued at $2-2.5 billion, trading activity remains limited. These firms may be publicly listed, but in effect, they operate like private companies with restricted market participation.

Read more: Markets can correct another 10%, believes Axis Capital's Neelkanth Mishra

The key takeaway? "Having the right DIIs on board is essential,” he emphasized. “They are no longer just participants—they are critical stakeholders in ensuring a company’s long-term success in the public markets."