Primary markets shine in FY26 even as shareholder exits outpace new capital: Economic Survey 2026

IPO

• India led global IPO charts with a 20% rise in volumes and 10% more funds raised
• OFS made up 58% of mainboard funds, signaling more exits than fresh capital
• Retail investor numbers and mutual fund participation surged due to SEBI reforms.

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India’s primary markets stayed remarkably buoyant through the first nine months of FY26, even as global issuance remained patchy. According to the Economic Survey 2025–26, tabled on Friday by Finance Minister Nirmala Sitharaman, IPO volumes rose 20% year-on-year while funds raised climbed 10%, helping India top global IPO charts during the period. The Survey attributes this resilience to stable macro fundamentals, rising retail participation and regulatory fine-tuning by SEBI.

But beneath the headline strength, the composition of fund-raising tells a more nuanced story. A growing share of primary market activity was driven by Offer for Sale (OFS) transactions. therefore, signalling a market that is increasingly facilitating exits and liquidity, rather than channeling fresh capital into corporate expansion.

Overall resource mobilisation from primary markets (equity and debt combined) stood at Rs 10.7 lakh crore till December 2025. Over the past five years, this figure has aggregated to Rs 53 lakh crore since FY22, including Rs 14 lakh crore raised via equity. On the mainboard, the number of listings rose sharply to 94 from 69 a year ago, lifting total proceeds to Rs 1.60 lakh crore from Rs 1.46 lakh crore. However, OFS accounted for nearly 58% of the amount raised, underscoring that “existing shareholders sold their stakes rather than companies issuing new shares,” as the Survey noted.

The SME segment, however, offered a more capital-raising oriented counterpoint. SME listings increased to 217 from 190, while funds mobilised jumped to Rs 9,635 crore from Rs 7,453 crore. Since inception, over 1,380 SMEs have tapped the market, raising more than Rs 35,000 crore, with around 350 eventually migrating to the mainboard. The Survey described SME platforms as a “stepping stone for high-potential firms,” reflecting sustained investor appetite for emerging businesses.

This vibrancy in primary markets has been closely intertwined with a surge in retail participation. Demat accounts grew by 235 lakh during the period, taking the total beyond 21.6 crore. Unique investors crossed 12 crore by September 2025, with women accounting for nearly a quarter. Mutual fund participation also broadened meaningfully, with unique investors rising to 5.9 crore, increasingly from non-metro regions. SEBI’s 2025 household survey shows 63% of households are now aware of at least one securities market product—helped by simplified onboarding and steady economic fundamentals.

The Survey also flags a structural shift in household savings. Equity and mutual funds now account for over 15.2% of annual household financial flows, up from around 2% in FY12, while bank deposits have fallen to 35% from 58%. Direct equity holdings climbed to Rs 84 lakh crore by September 2025, while indirect exposure via funds has nearly tripled since 2014. Monthly SIP inflows surged more than sevenfold to over Rs 28,000 crore during April–November FY26. Importantly, the Survey notes this reflects diversification rather than outright displacement of traditional savings.

On the regulatory front, the Survey highlights the Securities Markets Code, 2025 — introduced in December — as a significant reform. The Code consolidates legacy laws governing SEBI, securities contracts and depositories, while strengthening transparency through mandatory consultations and disclosures. It also limits interim regulatory orders to 180 days, expands SEBI’s board to 15 members with greater independent representation, and clearly defines the statutory role of market infrastructure institutions. The framework, the Survey concludes, could serve as a broader template for regulatory governance beyond capital markets.