Domestic firms have raised a record $12.5 billion through initial public offerings (IPOs) in the first nine months of 2026, according to analysis by LSEG, marking the highest January-September fundraising since records began in 1980. Despite this record performance, equity markets witnessed selling pressure with Nifty declining about 14% during the same period. The IPO market demonstrated remarkable resilience as the number of IPOs declined 17.9% year-on-year to 220 from 268 a year earlier, but proceeds rose 11.3% to achieve this historic milestone. September alone saw 34 mainboard IPOs raise ₹39,380 crore, representing the highest monthly total of 2026. However, offers for sale accounted for nearly three-fourths of proceeds, meaning most money went to existing shareholders rather than companies.
The IPO market witnessed an exceptional surge in H1 FY27, with 116 IPOs and QIPs mobilising ₹1.7 lakh crore, representing a 40% increase from the previous high of ₹1.21 lakh crore in the year-ago period. As per The Hindu BusinessLine, nearly 96% of the fundraising came in the July-September quarter following a subdued first quarter. Overall public equity fundraising surged 75% to an all-time high of ₹2.43 lakh crore in the first half of 2026-27 from ₹1.39 lakh crore a year earlier. The average issue size increased to about $57 million from $42 million, with several major offerings accounting for nearly 35% of total IPO proceeds. Investor appetite remained robust, with 42 of the 64 IPOs receiving subscriptions of more than 10 times, while the average listing-day gain was 19%, compared with 7% a year earlier. The IPO pipeline remains robust with 145 companies that have SEBI approval seeking to raise about ₹2.78 lakh crore, while another 102 companies planning to mobilise ₹1.87 lakh crore are awaiting approval.
The recent euphoria in India's IPO market is giving way to more selective investing, marked by greater scrutiny of valuations and pressure on issuers to rationalise pricing, according to Arka Mookerjee, co-head of equity capital markets at law firm JSA. As per Mookerjee, there is a gradual movement of investor reaction from euphoria to discernment for IPOs, with companies offering good value still able to attract demand despite secondary-market volatility. Neha Agarwal, MD & Head of Equity Capital Markets at JM Financial, noted that fundraising surged as markets stabilised on the back of lower crude prices, allowing corporates with strong capex requirements to leverage the short window of opportunity. She emphasized that escalating geopolitical uncertainties and crude volatility will likely pivot investor behaviour from momentum-driven to quality-driven, with the market expected to remain active but highly selective, placing a premium on reasonable valuations, proven business models, and clear earnings visibility.
Foreign institutional investors have sold more than $30 billion of Indian shares so far in 2026, according to data compiled by Bloomberg, while domestic institutional investors have bought about $68 billion, as per National Securities Depository Ltd. data. This divergence has created opportunities for domestic investment banks, who are increasingly winning underwriting mandates. V. Jayasankar, managing director and co-chief executive officer of Kotak Investment Banking Ltd., noted that this year's ECM activity has been dominated by IPOs and share sales by state-owned companies, giving domestic investment banks an edge in winning mandates. The deep relationships with Indian issuers and local investors have further strengthened their position, particularly as foreign portfolio investors remain relatively cautious. However, domestic liquidity helped support the IPO market despite foreign portfolio investors selling an estimated ₹2.7 lakh crore to ₹3 lakh crore worth of Indian equities during January-September.
Listing gains showed signs of cooling in September 2026, with the average listing premium falling to 15.1% from 24.4% in August, while the median declined to 5.9% from 21.3%, according to latest reports. Total equity capital market proceeds, including follow-on offerings and block sales fell 1.7% year-on-year to a three-year low of $40.8 billion, contrasting with the strong IPO performance. Investment banks saw mixed results, with equity underwriting fees dropping 9% to $415.6 million, even as overall investment banking fees rose 2% to a record $1.1 billion, supported by stronger M&A advisory activity. More than 130 companies holding SEBI approval for IPOs will test whether domestic liquidity can continue supporting new listings amid weaker market returns in the coming months.
