India’s IPO market in 2025 rested on a narrow institutional spine

India’s IPO market in 2025 rested on a narrow institutional spine

• Institutional anchor participation in 2025 IPOs was concentrated among few funds
• Large IPOs raised 44.5% of total capital, driven by repeated anchor investors
• Pricing power and market stability depended on a small set of institutions

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At first glance, India’s primary market in 2025 appeared busy and well-distributed. Close to 100 mainboard IPOs for which anchor-level disclosure sourced through Prime Database, tapped the market through the year drawing participation from retail investors, mutual funds (MFs), foreign portfolio investors (FPIs), and anchors. But a closer look at who actually showed up repeatedly tells a more concentrated story.

Within this universe, a high majority of IPOs saw either no MF or FPI anchor participation (that is, no participation by these institutions at the anchor stage). This immediately tells us something simple but important. Institutional capital was not evenly spread across the IPO universe, with participation concentrated in a relatively small subset of deals.

When frequency of appearances is examined, not just presence, the concentration becomes sharper. Mutual fund participation was concentrated among a few dozen domestic funds, most of which appeared repeatedly across anchor books (often across multiple large deals). In contrast, FPI participation appeared numerically broad but was fragmented across hundreds of offshore vehicles (including multiple funds and sub-accounts under the same global institutions), making true economic concentration harder to observe from disclosures alone.

This is not broad institutional participation. This is repeat concentration.

Two IPO markets can look identical on the surface. Both have MF participation in about 25% of deals and FPIs in about 15 to 20%. But structurally, they are very different if Market A has 30 to 40 different funds each appearing once or twice, and Market B has 5 to 10 funds appearing again and again. 2025 looks closer to Market B. Out of 36 mutual funds that participated as anchors, only two appeared just once, while 34 participated across multiple IPOs (indicating repeated risk-taking by the same balance sheets).

That matters because pricing power, risk absorption, and post-listing stability are increasingly determined by the same balance sheets, not by a rotating crowd. The top five institutions accounted for about 30%, while the top 10 accounted for 50.9% of total anchor appearances (measured by frequency of participation).

Most IPOs in 2025 were not mega IPOs. But capital mobilisation was not evenly distributed. Large IPOs (Rs 5,000 crore and above) were few in number, accounted for a disproportionate share of capital raised, and cannot clear without institutional anchoring. Retail participation alone cannot stabilise IPOs sized at Rs 10,000 to 15,000 crore (given the sheer ticket size involved).

Only eight IPOs were sized above Rs 5,000 crore, yet they together raised Rs 78,300 crore, accounting for about 44.5% of the total Rs 1.76 lakh crore raised by the 103 IPOs in the dataset.

Returns data from the year shows that large IPOs (worth over Rs 5,000 crore) recorded average listing gains of about 18%, while average current gains are around 27%. Smaller IPOs showed higher volatility and, in many cases, delivered average listing gains of about 8.7%, with average current gains around 31%. These are averages across IPOs at different listing points and are not meant as return comparisons, but as indicators of post-listing stability (or lack thereof).

These figures do not indicate whether institutions made money. They indicate that price discovery in large IPOs largely held, post-listing selling pressure was contained, and there were no sharp air-pockets, outcomes that are statistically inconsistent with weak anchor books or fast-churn participation. This is consistent with fewer anchors, larger tickets, and longer holding behaviour.

Average anchor ticket size in large IPOs was about Rs 25 crore, compared with about Rs 5 crore in smaller IPOs (based on disclosed anchor allocations). Institutional participation was, therefore, mostly selective, with the same institutions appearing repeatedly. Large IPO outcomes suggest effective stabilisation, with risk concentrated in a narrow institutional set. That is a structural inference.

When roughly a quarter of IPOs see MF participation, yet the same funds appear across a large share of those deals, primary market risk is not diversified. Pricing power becomes centralised, and market resilience depends on the behaviour of a few actors.

This shows up when volatility rises, liquidity tightens, and a handful of anchor investors step back. That is why this matters as a year-ender observation, not a trading takeaway.

Compared with earlier IPO cycles, participation was less euphoric, capital was less evenly distributed, and institutions behaved more like underwriters than momentum players. The market did not rely on many institutions doing small things. It relied on a few institutions doing heavy lifting.