India’s IPO market hit a record in 2025, but with fewer fireworks in the process

India’s IPO market hit a record in 2025, but with fewer fireworks in the process

• India's IPO market reached a record Rs 1.76 lakh crore in 2025, up 10% from 2024.
• Retail participation and listing gains fell, showing a maturing market
• Mutual funds overtook FPIs as anchor investors for the first time

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India’s IPO market hit a fresh high in 2025, but the year also revealed a clear shift in investor behaviour. While companies raised a record Rs 1.76 lakh crore through mainboard IPOs, weaker listing gains, softer retail participation and lower oversubscription levels pointed to a more selective—and maturing—primary market.

Data compiled by PRIME Database Group showed that 103 companies tapped the mainboard IPO route during the year, mobilising Rs 1,75,901 crore — around 10 percent higher than the previous peak recorded in 2024. Notably, this marked the first time India has seen two consecutive years of record IPO fundraising.

“In the past, a strong IPO year was almost always followed by a lull of two to three years. This time, that pattern has been broken,” said Pranav Haldea, managing director of PRIME Database Group.

IPO boom masks broader slowdown

Despite the record IPO haul, overall public equity fundraising declined 18 percent year-on-year to Rs 3.06 lakh crore in 2025, from Rs 3.74 lakh crore in 2024. The fall was largely driven by lower mobilisation through qualified institutional placements (QIPs), offers for sale (OFS) and follow-on public offers (FPOs).

QIP fundraising fell sharply to Rs 72,387 crore from Rs 1.38 lakh crore last year, while OFS proceeds declined 38 percent to Rs 19,712 crore. Government divestments accounted for Rs 7,697 crore of OFS activity, with stake sales in Bank of Maharashtra, Indian Overseas Bank and Mazagaon Dock Shipbuilders.

Large deals dominate primary market

A handful of large IPOs accounted for a sizeable share of the year’s mobilisation. Tata Capital was the biggest IPO of 2025, raising Rs 15,512 crore, followed by HDB Financial Services (Rs 12,500 crore) and LG Electronics (Rs 11,605 crore). At the lower end, Jinkushal Industries raised Rs 116 crore. Average IPO size stood at Rs 1,708 crore, broadly unchanged from last year.

New-age technology companies remained active, with eight such IPOs raising Rs 30,602 crore during the year, compared with Rs 27,584 crore in 2024.

Investor enthusiasm cools

Investor response, while still healthy, moderated compared with last year’s frenzy. Only 60 percent of IPOs received subscriptions of more than 10 times, down from 72 percent in 2024. The average number of retail applications fell to 14.99 lakh from 18.87 lakh a year earlier, reflecting a decline in retail participation.

Retail investors applied for shares worth Rs 2.95 lakh crore, about 68 percent higher than the total IPO mobilisation, compared with 113 percent in 2024. Actual allocation to retail investors stood at Rs 46,069 crore, or 26 percent of the total IPO amount.

Listing gains disappoint

Weaker listing performance further dampened sentiment. Average listing gains fell to 10 percent in 2025 from 30 percent in 2024. Only 36 percent of IPOs delivered returns of more than 10 percent on listing day, compared with 67 percent last year.

As of December 24, 2025, 54 of the 102 listed IPOs were trading above their issue price, with the overall average return at around 8 percent. Haldea noted that longer-term IPO returns remain strong, countering the perception that IPOs are consistently overpriced.

Institutions step up, mutual funds overtake FPIs

Institutional participation remained robust. Qualified institutional buyers, including anchor investors, accounted for 62 percent of total IPO subscriptions. For the first time, mutual funds overtook foreign portfolio investors (FPIs) as anchor investors.

FPIs, despite being net sellers of Rs 2.30 lakh crore in the secondary market, invested around Rs 73,000 crore in the primary market during the year, while mutual funds accounted for 22 percent of total issue subscriptions.

SME IPOs expand, but volatility rises

The SME IPO segment also saw higher activity, with 267 issues raising Rs 11,430 crore—30 percent more than in 2024. However, retail participation, oversubscription levels and listing gains in the segment weakened sharply, mirroring trends seen in the mainboard market.

Heavy pipeline into 2026

Looking ahead, the IPO pipeline remains crowded. Nearly 200 companies are either holding SEBI approval or awaiting clearance, collectively targeting more than Rs 2.6 lakh crore. In addition, several new-age technology companies are preparing to file draft offer documents.

“If valuation discipline is maintained and the secondary market remains stable, even if not bullish, the coming years could still be a golden phase for India’s IPO market,” Haldea said.