India Sets New IPO Record in 2025 with Massive Fundraising Surge
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General Studies Paper II: Growth and Development, Capital Market |
Why in News?
According to a strategy report by Motilal Oswal Financial Services, India’s primary equity market in 2025 reached a historic peak, raising a record ₹1.95 trillion through more than 365 initial public offerings. This surge marked the strongest year ever for fundraising, reflecting robust investor confidence.
Record Fund Mobilisation and Market Depth in 2025
- In 2025, India’s primary equity market achieved an all-time high in funds raised through initial public offerings (IPOs). Companies collectively raised approximately ₹1.95 trillion via over 365 IPOs during the year. This level of capital mobilisation was the highest ever recorded in the Indian primary market’s history.
- India raised ₹1.90 trillion through 336 IPOs in 2024. The 2025 achievement of ₹1.95 trillion thus reflects a steady upward trend in capital raising. Over the two-year span of 2024 and 2025, nearly ₹3.8 trillion was raised through about 701 IPOs, highlighting significant expansion in market activity.
- Over the past two years, just 198 mainboard companies have collectively garnered ₹3.6 trillion, surpassing the total funds raised in the preceding five-year period and solidifying their central role in the nation’s financial landscape.
- Although small and medium enterprises (SMEs) accounted for most IPO counts, it was the mainboard companies that drove the majority of the funds raised. In 2025, around 94% of total IPO proceeds came from mainboard listings. Subscription levels for several cases crossed 100x, extreme demand led to much higher levels, such as Shyam Dhani Industries (918x) and Austere Systems Ltd. (749.69x).
- In 2025, India was among the top global IPO markets in terms of funds raised. Looking back over the past decade, IPO fundraising has grown dramatically.
- Approximately 55% of mainboard IPOs listed over the last two years (108 out of 197) are currently trading above their offer prices. At least 14 companies delivered post-listing gains exceeding 100%.
Sectoral Participation
- Financial Services: The financial services sector, especially non‑banking financial companies (NBFCs), was the largest contributor in 2025. NBFCs raised ₹635 billion across 24 IPOs, accounting for about 26.6% of total proceeds—the highest share among all sectors. This leadership shows strong investor confidence in credit businesses such as retail lending, housing finance and asset management.
- Mainboard Firms: While many companies came from smaller segments, mainboard listings dominated capital mobilisation. Of the total IPOs, 106 were mainboard listings, and these firms raised ₹1.83 trillion collectively. The dominance of mainboard firms shows that larger and more established companies played a central role in the 2025 market.
- Tech‑Driven Companies: New‑age companies, especially in technology and digital services, also entered the public market in 2025. Emerging tech firms in areas such as fintech, digital platforms, and software saw strong interest. For example, completed tech‑linked offerings like ICICI Prudential AMC’s ₹10,602 crore IPO reflect growth opportunities in asset management tech and financial platforms.
- Capital Goods: The capital goods sector contributed significantly to the IPO pipeline in 2025, with a share near 9.5% of total funds raised. Industrial firms involved in manufacturing machinery and infrastructure reported strong investor demand. This trend aligns with broader efforts in India to boost manufacturing and infrastructure under programs such as “Make in India.”
- Innovation Economy: An important trend in 2025 was the rise of younger companies, defined as entities less than 20 years old. These companies contributed nearly 53% of the total IPO funds raised over the last two years, showing that newer and innovative firms are increasingly accessing public capital earlier in their growth journeys.
- Regional Sector: Small and medium enterprises (SMEs) across states such as Gujarat also made their mark in 2025. Gujarat SMEs alone raised ₹2,212 crore through 57 listings, evidencing strong regional entrepreneurial activity. SME participation broadened the market base and gave smaller firms access to public funds for the first time.
- Giants: Most notably Tata Capital’s ₹155 billion IPO in October 2025, which became the fourth-largest public issue in India’s history. This blockbuster offering, alongside others like Bajaj Housing Finance’s ₹65.6 billion listing, underscored the robust demand for established financial brands.
Key Drivers Behind the Surge
- Strong Economic Growth: India’s economy maintained robust growth in 2025, with GDP expanding at one of its fastest rates in recent quarters. The Reserve Bank of India (RBI) reported that the economy grew by around 8.2% in the July‑September quarter of 2025, supported by strong urban consumption and private demand. This growth trend strengthened investor confidence.
- Domestic Liquidity Conditions: In 2025, abundant liquidity in the financial system played a key role in driving IPO activity. Mutual funds and other domestic institutional investors recorded large net inflows. Data showed that equity mutual funds alone saw net inflows of over ₹3.22 trillion in the first 11 months of 2025, which helped support IPO subscriptions and primary market demand.
- Retail Investors: Retail investor participation surged in 2025 and became a major support for IPO subscriptions. Many individual investors entered the equity markets through systematic investment plans (SIPs) and direct applications in IPOs. This broader base of retail demand kept subscription rates high, even for mid‑sized and new‑age company listings.
- Policy Support: The Indian government and market regulators continued to support capital formation through policy measures. Recently the Finance Minister introduced this landmark bill to consolidate the SEBI Act (1992), SCRA (1956), and Depositories Act (1996) into a single, unified framework. SEBI relaxed minimum public offer (MPO) requirements for very large companies. The domestic anchor investor allocation was increased from 33% to 40%.
- Improved Global Positioning: According to Ernst & Young (EY)’s Q1 2025 IPO Trends Report, India captured a significant 22% share of global IPO activity in the first quarter of 2025, listing 62 companies and raising $2.8 billion, driven by strong tech demand (like Hexaware’s $1B IPO) and diverse sectors. This global interest was driven by India’s market size, growth potential, and strong valuations.
