India's IPO market achieved unprecedented success in FY26, with 112 companies raising a record ₹1.79 lakh crore through mainboard IPOs, according to The Hindu BusinessLine. This represents a 10% increase from the previous high of ₹1.62 lakh crore raised by 78 IPOs in the preceding year. As reported by PRIME Database Group, this marks the first time in history that there were two consecutive years of all-time high IPO fundraising activity. The largest mainboard IPO was from Tata Capital at ₹15,512 crore, followed by HDB Financial Services at ₹12,500 crore and LG Electronics at ₹11,605 crore. Despite a slower final quarter that raised only ₹18,772 crore, the annual total fundraising hit the record figure.
Despite the record fundraising, market response showed significant moderation compared to previous years. According to The Hindu BusinessLine, only 60 out of 108 IPOs received a mega response of over 10 times, down from 72% in FY25. The average number of retail applications declined to 12.87 lakh in FY26 against 21.31 lakh last year, with Bharat Coking Coal leading at 68.95 lakh applications. The average IPO size was ₹1,598 crore, 23% lower than ₹2,082 crore last year, indicating a change in the typical scale of offerings. As reported by PRIME Database Group, the gap between record-setting fundraising would have been higher if not for tepid mobilisation of just ₹18,772 crore in the March quarter.
IPO listing performance faced significant challenges in FY26, with 71 out of 108 IPOs trading below their issue price as of March-end, according to The Hindu BusinessLine. The average return of the 108 IPOs was negative 7%, ending a trend of positive returns and marking a major change from previous years when average listing gains were much higher, often over 20-30%. Data from mid-February showed average listing gains dropped to 8.88%, the lowest in seven years, with only about 65% of IPOs trading above their issue price. This weaker listing performance, combined with geopolitical uncertainties and volatile secondary market conditions, impacted overall market response and investor confidence.
Rising geopolitical tensions, including the conflict in West Asia and global uncertainties like US tariff measures, have dampened investor confidence and caused significant swings in the secondary market. This market unease has been accompanied by large withdrawals by foreign institutional investors (FIIs), reducing available cash and investor interest in new listings. Concerns about high valuations are a key reason for limited listing gains, with the large number of IPOs in recent years, combined with aggressive pricing and possibly overly optimistic forecasts, creating an oversupply of offerings competing for available capital. Stricter rules from SEBI on IPO pricing and disclosures might also be causing companies to reconsider their listing plans, leading to postponements or smaller issue sizes.
Looking ahead to FY27, industry experts remain optimistic about continued IPO activity, with the pipeline for the upcoming fiscal year remaining strong. As reported by The Hindu BusinessLine, SEBI has approved 144 companies looking to raise about ₹1.75 lakh crore, with another 63 companies seeking approval. Experts expect capital raises to reach around $20 billion next fiscal year, with the focus shifting from just the number of IPOs to 'quality, scale, and pricing discipline'. Future IPO success will depend on companies showing strong management, clear profit potential, and leadership in growing sectors, as high-quality companies are expected to attract investor interest in a more selective market.
