MUMBAI: The sizzling primary market is set to get hotter for a more bumper year in 2026 when issues worth over $20 billion, or around Rs 1,80,000 crore, are expected to flood the market.
The primary market has already seen a whopping Rs 1,52,623 crore being raised through IPOs this year till November 14. The year has six more weeks to go when more than Rs 30,000 crore worth of issues are set to hit the Street, ensuring that 2025 will break last year’s record of Rs 1,59,784 crore fund-raising through the primary market.
No wonder two of Wall Street's storied names have an overweight call on India this year, with Morgan Stanley pegging the Sensex at 1,07,00 by December 2026 while its peer Goldman Sachs sees the Nifty scaling past the 29,000 mark by then.
According to a forecast by brokerage Equirus Capital, next year is set for a bumper show on Dalal Street with issues that may total up in excess of $20 billion. Bhavesh Shah, MD & Head of investment banking at Equirus Capital, bases his bullish outlook on the mountain of foreign equity awaiting an exit, saying as much as $165 billion worth of private investments that came during the past five years are looking for exit opportunities in future, making the 2026 IPO pipeline looking healthy.
This will see more and more new-age companies tapping the primary markets to give them an exit, while many large cap issues like Flipkart, Phonepe, Jio Platforms, NSE, SBI Mutual Funds and Oyo among others will ensure there is market liquidity and funds flowing.
Shah also expects next year to dwarf many of the existing records such as the number of issues, the money being raised as also in terms of the issue size as the Walmart-owned ecommerce giant Flipkart is set to launch the nation’s largest IPO ever. He has not put a number to the likely volume though.
This is in contrast to the near $18 billion likely raised this year from 100 plus issues, which tops the 2024 record of 91 issues mopping up close to $19 billion.
However, in terms of number of issues, 2007 remains at the top with a record 107 issues, but raising only Rs 45,200 crore, which shows that the average issue size has massively scaled up to around Rs 850 crore in the past five years alone. Last year saw the country’s largest issue hitting the market when Hyundai had mopped up Rs 27,870 crore through its IPO.
Next year also will see the primary market continuing to be dominated by offer for sales or secondary sale of equities by promoters and existing investors—something the chief economic advisor to the government Anantha Nageswaran flagged earlier this week. He said going overboard with the IPO market is not a fair way of assessing the market maturity as most of the recent success in terms of money raised was OFS and not fresh issues. While fresh issues are growth capital, OFS is cash withdrawal from the economy or profit-booking.
The OFS numbers are telling enough too: As much as 63%, or Rs 95,827 crore which is a record, of the money raised so far (Rs 1,52,623 crore) from the primary market is through OFS, up from 60% or Rs 95,285 crore, in 2024, which in 2023 was only 58% of the total. The OFS in terms of percentage of the total peaked in 2022 when as much as 70% or Rs 41,643 crore of the total Rs 59,302 crore raised from IPOs were through OFS.
In the past decade (since January 2015), while funds raised through the IPO route totaled Rs 7,17,056 crore, the OFS component was a whopping Rs 4,72,780 crore, or 66% of the total when as much as 483 issues hit the market.
Shah attributes the optimism to the economic growth and other positive drivers like a faster growth in manufacturing which will lead to higher per capita income, and steadily growing fiscal consolidation.
“Currently India is standing out as a place where investors can find sustainable growth,” he concludes.